Islamabad: a warning was issued to the Pakistani government by a coalition of main international lenders, warning that its passage to unilaterally renegotiating the energy purchase agreements (APP) with wind and solar energy producers (IPP) could erode the confidence of investors and disrupt the future energy sector in the energy sector.
Development financing institutions (DFIS), including the Asian Development Bank (BAD), KFW, FMO and the Islamic Development Bank (ISDB), have been warned in a strongly formulated joint letter sent to the main ministers of the government which Go around lenders in the modification of renewable renewable energies The contracts could lead to serious consequences.
“We believe that the renegotiation of apps in a non -consultative manner will be detrimental to the long -term development of the sector, undergoing the confidence of investors and discouraging the essential private investments essential,” said the DFIS in the letter, a copy of which was obtained by The news.
The warning follows the energy of the energy group energy, the proposal to revise the apps with the IPP financed by DFIS. The government has since organized meetings with each PPI to discuss the proposed changes and put pressure for its implementation.
Lenders, who have collectively invested $ 2.7 billion in the Pakistan electricity sector, warned that forcing PPIs to accept new conditions could dissuade foreign investments, violate existing agreements and erode confidence in financial commitments of the country.
The warning comes as the Pakistani government, struggling with an aggravation of the energy crisis and increasing budgetary pressures, seeks to modify contracts with renewable energy producers to reduce energy prices.
However, lenders argue that Pakistan must honor its existing agreements, adding that any change requires prior approval of financiers.
“Under the terms of their financing and investment agreements, the PPIs that we have funded are not authorized to accept changes to a major project document, including the PPA, without prior written approval of the lenders,” said the letter.
The DFIs have urged the government to reconsider its position and to continue “a sustainable and fair approach” to solve the structural problems of the energy sector.
The letter highlights increasing concerns among foreign investors concerning policy inversions and breaking up, which have already slowed down foreign direct investments in the power sector of Pakistan.