1 PRESENTATION ON Financial Issues & Business Plan FY 2011 PAKISTAN POWER SECTOR

2 Financial Issues

Power Sector Debt Parked in PHCL (Debtco) * Issuance of revised guarantees/payment of transfer fee 3

Receivable Status

PAYABLE POSITION AS ON

Delay in Payment of Subsidies by GOP FY

Delay in Payment of Subsidies by GOP FY

Impact due to delay in tariff FY

Details Regarding GST Receivable 9

DisCos Tariff Determined and Notified 10

11 Progress (July – Spet, 2010)

Billing, Collection & Recovery Ratio (July-Sept.) 12

Analysis of DISCO Losses (July-Sept.) 13

Analysis of Consumption Mix (July-Sept.) 14

Analysis of Generation Mix (July-Sept.) 15

16 Business Plan FY 2011

1Net Electrical Output on the basis of last three years actual figures and new IPPs and RPPs. The source wise energy is as follows :-(Values in MkWh) Business Plan FY ASSUMPTIONS FY Actual FY Projected i.WAPADA Hydel27,61229,486 ii.GENCO’S18,36412,036 iii.IPPs including SPP37,20734,854 iv.NEW IPP4,34012,712 v.RPP753,050 TOTAL87,58992,138 2 Revenue calculated on the basis of three month actual ( July – Sept. 2010) and projected Oct- June 2011 on the basis of GOP notified tariff effective RFO Rs M/Ton 4 Gas Rs. 394/MMBTU 5 US Dollar Rs. 86.5/$. 17

18 1 Quantitative Data NEO (MkWh) Estimated Units Sales (MkWh) 73,369 Losses (%) 20.4% 2 Revenue/Tariff Required Bln. Rs. Rs./kWh % age Power Purchase Price Prior year adjustment Distribution Margin Total Less Revenue through Tariff Gap (Bln. Rs.)(165.3)(2.25)-31.2% FINANCIAL OUTLOOK FY (Base Case Energy 92,138 MkWh)

Business Plan FY

Net Revenue Gap after 2% Monthly Tariff increase FY

Net Revenue Gap after 3% Monthly Tariff increase FY

Issues  Unified Tariff.  Determined tariff to be notified by NEPRA.  Opening of LC by DISCOs for power purchase.  Payment arrears from GoP, KESC and Provincial Governments  Additional Gas allocation to Power Sector  Immediate GST Refund by FBR (Difference of input of output) of Rs. 27 billion)  Payment of GST on billing basis instead of Collection basis.  Governance issues of HESCO, PESCO and QESCO  Theft and non payment culture  Continued non payment by KESC  Unfavorable consumer mix  Unfavorable Generation mix 22

23

Distribution losses FY

DISCOs Determined and Notified Tariff

Monthly Estimated Revenue & Cost FY

Receivable from GOP, KESC and Provincial Govts 27

Fuel Prices and US $ Statement 28

Impact of Fuel Price Adjustment 29