Pakistan to sell two gas power plants to Qatar

Islamabad: Pakistan is expected to sell two gas-fired power plants to Qatar in an estimated $1.5bn deal to avoid a looming sovereign default, media reports said.

The development came two days after the government constituted a new cabinet committee to sell state assets on a fast-track basis. The newspaper reported that the 2460 MW capacity LNG-fired power plants will now be handed over to this committee to find a suitable foreign buyer.

These plants had been set up with government funding during the last PML-N government and are owned by the National Power Park Management Company.

A new law enacted last year authorises the direct sale of assets to foreign nations, instead of following the long and cumbersome process set under the Privatisation Ordinance of 2000. There is one view that only 30% equity will be sold to Qatar and the price discovery will be based on known factors, reducing the element of discretion, the newspaper reported.

Pakistan faces an imminent threat of sovereign default due to a delay in the revival of the International Monetary Fund programme. Finance minister Ishaq Dar has listed the sale of the gas-fired power plants among the “low-hanging fruits” that will be sold to arrange foreign currency. Dar has vehemently denied that Pakistan will default on its debt obligations.

Pakistan had engaged Credit Suisse in April 2019 to sell the plants, but the contract expired in October 2020 and was extended for a period of one and a half years. The agreement, however, expired again on April 29, 2022, a news report said.