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Financial burden delaying mega hydropower projects

STAFF REPORTER LHR: Wapda has showed its concern that the authority has been facing tremendous difficulties in discharging its mandated role due to financial constraints.
The meeting, presided over by chairman Zafar Mahmood, observed Wapda at present has the mandate of development of water storage capacity and hydel power generation in the country.
Wapda is now being treated like other IPPs for tariff determination and the present mechanism for power tariff determination for Wapda hydel generation does not have any fiscal space for implementation of future projects.
As a result of difficulties in arrangement of funds, Wapda has failed to attain financial close for ongoing 969-MW Neelum-Jhelum, 106-MW Golen Gol and other Hydropower Projects.
Due to narrowing down of fiscal space both locally as well as internationally, financial constraints are creating hurdles in the execution of other projects such as Diamer Basha Dam, Dasu and Bunji Hydropower Projects.
Wapda has been approaching capital markets to generate funds for construction of its projects by issuing Wapda Bonds and Sukuk Bonds. The meeting expressed its satisfaction that Wapda never defaulted on those bonds.
However, issuance of bonds has its own limitations as they are accompanied by sovereign guarantees, it was observed. It was discussed in the meeting that the value of assets owned by Wapda runs into billions of rupees.


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