The National Electric Power Regulatory Authority (NEPRA) has approved a crucial tripartite power purchase agreement (TPPA) involving Central Power Purchasing Agency (Guarantee) Limited (CPPA-G), Kot Addu Power Company Limited (KAPCO), and the National Grid Company of Pakistan Limited. This agreement will govern the future electricity sales from KAPCO’s power plant.
KAPCO announced the regulatory approval in a notice to the Pakistan Stock Exchange (PSX) on Tuesday, stating:
“We are pleased to advise that the NEPRA vide letter dated May 19, 2025 addressed to the Central Power Purchasing Agency (Guarantee) Limited (CPPA-G) has granted approval of the TriPartite Power Purchase Agreement (TPPA) between the CPPA-G, KAPCO and National Grid Company of Pakistan Limited along with the schedules.”
However, NEPRA’s approval comes with conditions that must be fulfilled before the agreement becomes effective. Specifically, the agreement is contingent upon:
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The conduct of an Initial Capacity Test (ICT)
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A Heat Rate Test (HRT) to benchmark operational efficiency
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Evaluation and determination of Simple Cycle Efficiency/Heat Rate metrics by an independent engineer
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Submission of the ICT and HRT reports to NEPRA
Once these preconditions are met, the TPPA will officially be activated, paving the way for the operational phase of KAPCO’s power plant under the new regulatory framework.
This development follows NEPRA’s decision last month to grant a provisional Take-or-Pay tariff to KAPCO after an intense public hearing on April 8, 2025.
Incorporated on April 25, 1996, KAPCO is a public limited company that owns and operates a multi-fuel-fired power plant located in Kot Addu, Punjab. The facility comprises fifteen generating units with a total nameplate capacity of 1,600 MW. The company primarily sells electricity to the Water and Power Development Authority (WAPDA) under its existing Power Purchase Agreement (PPA).
The approval of the TPPA marks a significant step in enhancing Pakistan’s power sector regulatory clarity and ensures smoother coordination between the country’s generation and distribution agencies.
