Soomro Asks Banks To Provide Procedural Support For Privatization Process

Federal Minister Mohammadmian Soomro on Thursday asked the financial sector to participate as lenders to successfully complete the subject transaction for the privatization process in the country

ISLAMABAD, (UrduPoint / Pakistan Point News - 23rd Jul, 2020 ):Federal Minister Mohammad mian Soomro on Thursday asked the financial sector to participate as lenders to successfully complete the subject transaction for the privatization process in the country.

Federal Minister Mohammadmian Soomro and Special Assistant to Prime Minister (SAPM) Nadeem Baber met with the heads of international and local banks in Karachi, said a press release issued by Ministry of Privatization here.

The meeting was attended by, Board members, members of financial advisory consortium(FAC), deputy governor State Bank , presidents and group chiefs of NBP, MCB, UBL, ABL, Habib Metropolitan, Bank Al Habib, Bank Alflah, Bank of Punjab, HBL, Meezan Bank and Faysal Bank. In the meeting debt arrangement for two RLNG power plants of National Power Parks Management Company Limited. (NPPMCL) was discussed.

According to press release the twelve IPs were shortlisted for bidding NPPMCL was formed with an objective to reduce the electricity/power demand and supply gap in Pakistan.

The GoP is now considering divesting up to 100% of its shareholding in NPPMCL to a potential investor, along with management control.� As part of the privatization process, the Potential Bidders will be required to re-finance GOP/PDFL funding and NPPMCL existing commercial debt through foreign and/or local debt financing.� In order to successfully complete the transaction, it is critical to ensure that Potential Bidders are able to secure sufficient PKR denominated financing.

Therefore, participation of local banks is important to provide additional confidence to Potential Bidders for successfully closing the transaction.

In order to encourage the potential investors, Federal Minister Mohammed mian Soomro met with heads of various commercial banks today in State Bank of Pakistan (SBP), Karachi.

The heads were to raise the requisite long-term financing within the benchmark approved by NEPRA, and also support Potential Bidders in obtaining NOCs for continuation of Working Capital Lines, which is in addition to the long-term financing.

Minister said that considering the importance of the privatization of these power plants for the government, the Privatization Commission would appreciate the cooperation of commercial banks/lenders to facilitate a successful transaction within the envisaged timeline.

SAPM and Minister for Power apprised that the government in its reform process to address the issues of circular debt, however, due to pandemic the process remained stalled for some time.

It was also discussed that negotiation with the older IPPs are in progress to find ways to address cost of generation. The banks proposed that the government may consider the terms of tariff to encourage bank interest in the subject transaction.