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ANNUAL REPORT Private Power and Infrastructure Board ANNUAL REPORT Private Power and Infrastructure Board Signing of project agreements of Kohala Hydropower Project 25.06.2020 SIGNING KOH PO | 中国三峡 AGREMENTS OF 11 RO TU 1124 MW Kohala Hydropower Project is Pakistan's largest private sector hydropower project which is being processed by PPIB under the framework of CPEC. Project Agreements of Kohala comprising IA, TPPA and TPA were signed on 25th June 2020. Issuance of Tripartite Letter of Support to Small Hydropower Projects In order to tap vast potential of hydropower generation in the country, PPIB announced issuance of Tripartite Letters of Support (TLOS) to Small Hydropower Projects. As a first step, PPIB issued TLOS to 7.08 MW Riali and 8 MW Kathai on 16 Oct, and 20 Nov 2019 respectively Implementation Agreement of Thar Coal based Shanghai Power Project Implementation Agreement (IA) of Pakistan's largest Thar coal based 1320 MW Shanghai Power Project under CPEC was signed between PPIB and Project Company on 19th December 2020. Project is well on track, and it is anticipated that FC will be achieved in near future Role in implementation of Competitive Trading Bilateral Contracts Market (CTBCM) Power Sector has been working towards transition of existing market from single buyer model to a Competitive Wholesale Power Market. To make a competitive wholesale electricity market, a comprehensive plan which is "Competitive Trading Bilateral Contract Market" (CTBCM) is in the process of implementation. Pursuant to CTBCM detailed design, PPIB as an Independent Auction Administrator (IAA) will be responsible to provide support to DISCOS in procurement of new capacity on competitive terms through auctions as per provisions of the applicable procurement regulations. PPIB will also be responsible for Procurement Planning for DISCOS based on new capacity additions requirement for the system as worked out in the IGCEP. Further in case, DISCO is not credit worthy to provide the credit cover, the IAA will provide support in form of arranging guarantees and it will also provide security cover against financially weak DISCOS. Accordingly, pursuant to NEPRA's CTBCM Determination dated 5th December 2019, PPIB has constituted a dedicated Market Implementation Group (MIG) of its professionals. PPIB's MIG with full support of top management has been working on achieving the tasks assigned to PPIB under NEPRA's CTBCM determination. The Group is working in close collaboration with CPPA-G team assuring full organizational support in implementation of approved Market Model and subsequently updated Road Map. PPIB is actively working on the assigned tasks including formulation of new draft policy framework, merger plan of AEDB into PPIB, preparation of application for IAA registration with NEPRA, HR & IT strengthening to perform its role as an IAA in future electricity market. As per NEPRA's determination the target COD of CTBCM is 2nd quarter of 2022. Support in Preparation of Indicative Generation Capacity Expansion Plan (IGCEP) PPIB having leading role in arranging power generating capacity, actively contributed and provided comprehensive inputs on processes, methodology, assumptions, basis used to workout demand projection and selection criteria and time lines of projects being evaluated under Indicative Generation Capacity Expansion Plan (IGCEP). IGCEP has been prepared by National Transmission and Despatch Company (NTDC) as per the grid code requirements of NEPRA. During consultative process related to IGCEP, PPIB provided its full support in the form of relevant data provision related to its future power projects. Support in National Electricity Policy 2020 Pakistan's power market is fully poised for long term and sustainable structural reforms based on the principles of competitiveness, transparency and sustainability. Under the CTBCM, it is being envisioned that the structural reforms will bring more confidence in the market and competition thus will bring the prices of electricity down to affordable level. This in turn will help to ease fiscal pressure on the Federal Government. The draft National Electricity Policy 2020 of the GoP, which is about to be launched in the near future, identifies inter-alia the major goals to be achieved for the Power sector and provides policy level directions. It also plays the key guiding principles to develop subservient frameworks that will steer the decision making in the electricity sector to achieve the identified goals. Accordingly, following such principles, PPIB is aiming to synchronize the existing power generation framework with National Electricity Policy 2020 with its overarching long-term goals comprising but not limited to i) affordability, ii) Energy Security and iii) Sustainability and to dovetail the generation 15 16

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