The government and K-Electric have agreed to sign a new Power PurchaseAgreement (PPA) to supply a total of 2,050 MW to Karachi.

According to the reports, under this agreement, the government will pay thetariff subsidy on time and clear its electricity bills through theK-Electric standby letter of credit (SBLC).

In this regard, the government has pledged to sign a separate agreementwith the Ministry of Finance for the payment of market-based mark-up forthe delay in payment of subsidy.

In collaboration with K-Electric Screw Account will provide SBLC to ensurethat Central Power Purchasing Agency (CPPA) Electric receives payment formonthly bills due to power supply under the automated system.

Old payments and receipts will be settled through mediation.

K-Electric’s key demand for linking subsidy payments with electricity billsto the CPPA is at a May 5 meeting of the Economic Coordination Committee(ECC) subcommittee, an official said.