Investor Presentaiton

ANNUAL REPORT P Private Power and Infrastructure Board ANNUAL REPORT Private Power and Infrastructure Board MPCL in June 2018 submitted a request for issuance of LOI for setting up a 180 MW CC Power Project in Phase-I using available and unallocated 66 MMCFD Low BTU Gas from Goru-B Reservoir of Mari Gas field while 100 MW to be installed as and when the 44 MMSCFD of gas becomes available. PPIB advised MPCL to provide consents from CPPA-G (on proposed plant size, technology, fuel, location & commitment for power procurement), NTDC (for arrangement of power evacuation & power dispersal facilities) and Petroleum Division (on allocation of gas for the term of the Project). Accordingly, MPCL requested CPPA-G, NTDC and Petroleum Division's consents/approvals for the Project. PPIB Board in its 125th meeting held on 29th August 2019 approved allocation of 44 MMCFD gas, available from Mari gas field after vacation of interim order by Sindh High Court, to Mari Petroleum Company Limited (MPCL). Regarding 66 MMCFD additional Mari Deep Gas approved by the ECC for power generation, the Board recommended to Power Division to allocate it to MPCL, considering the first right of refusal clause-6.3(ii) of the Power Generation Policy 2015, for developing a new power project based on combined 110 MMCFD gas. However, the power project shall be processed by PPIB after issuance of consents by CPPA-G for power procurement and NTDCL for power evacuation and in conformity with the requirements and timelines etc. of the approved Generation Capacity Expansion Plan. (II) 20 MW CCPP Proposed by Pakistan Petroleum Limited Brief introduction: > Project Name > Project Company Location Capacity > Fuel Technology > : 20 MW CCPP by Pakistan Petroleum Limited : Pakistan Petroleum Ltd. : Near Shahdadpur, District Sangarh, Sindh : 20 MW (Gross) : Indigenous gas of low heating value (from Hatim Field) : Combined Cycle Gas Turbines (CCGT) M/s. Pakistan Petroleum Limited (PPL) had placed a request with PPIB to register its proposed 20 MW CCPP as an IPP project based on non-pipeline quality gas from Hatim X-1 and Faiz X-1 discoveries in Gambat, District Sanghar, Sindh (the Proposed Project), and the company was informed that the processing of the proposed project would be considered after submission of consents / NOCs from CPPA-G, NTDCL and MoP&NR (now Petroleum Division - Ministry of Energy). DG Gas conveyed the "no objection" of MoP&NR to PPL for exercising its first right of refusal to set up its own IPP based on supply of low BTU gas from Hatim X-1 & Faiz X-1. During a meeting, at PPIB, CPPA-G showed its willingness to purchase power on 'Take and Pay' basis, provided the proposed project is included in the Indicative Generation Capacity Expansion Plan (IGCEP), developed by Planning (Power) NTDCL. PPIB forwarded information submitted by PPL to NTDCL with the request to consider for inclusion in the IGCEP. NTDCL apprised that the Proposed Project would be considered for optimization in the IGCEP-2047 as a candidate power project. The selection of the Proposed Project in the IGCEP 2047 would be decided on the basis of least cost optimization. As per the information available at NEPRA website, the Proposed Project has been considered in the IGCEP as a candidate power project. Competitive Trading Bilateral Contract Market and PPIB's Role as IAA In perspective of fundamental shift in the entire power system model in the country to make it operationally and financially viable, GoP is planning to implement Competitive Trading Bilateral Contract Market (CTBCM) which basically aims at transition of existing market from single buyer model to a competitive wholesale power market. The objectives of CTBCM include; > > > > Create the conditions for a fair allocation of risk and benefit sharing between investors/sellers and buyers/consumers Level the playing field removing conflict of interest to facilitate entry of new investors and participation of private players, including Bulk Power Customers Create the conditions to attract investments based on credit cover provided by market participants, without the need of the government providing sovereign guarantees Pressure on the payment discipline Improve efficiency arising from competition for the market (new capacity procurement) and in the market (optimization through centralized economic dispatch within system security constraints, to maximize the economic benefits of available resources and promote efficiency) Enhance power sector security of supply, generation adequacy, to develop power sector sustainability in the short, medium and long term Ensure accountability of all Participants and Service Providers Ensure transparency and predictability Open access to information Having extended list of success stories on its credit, PPIB enjoys a unique status among other stakeholders. Starting from implementing IPPs program in 1994, 2002 and 2015, efficient handling of gigantic CPEC energy chapter, delivery of first two hydro IPPs and first Thar coal based IPP, long list of upcoming indigenous coal and hydro based projects, processing first ever private transmission line project and also Small Hydropower Projects are some of the iconic highlights of PPIB's excellent track record. PPIB being one of the key departments of the GoP in the Power Sector would be playing a crucial role of Independent Auction Administrator (IAA) under the CTBCM Model. PPIB as an 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 a 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. 121 122

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