Depending upon the method for acquiring the Project, National Electric Power & Regulatory Authority (“NEPRA”) provides three different tariffs at three different stages of the Project.
- First Tariff- Feasibility Stage Tariff
- Second Tariff- EPC Based Tariff
- Third Tariff- COD Stage Tariff
First Tariff is based on the cost estimates provided in the approved feasibility study of the Project. According to the Power Policies at federal and provincial levels, the tariff of a power project is determined on Cost-Plus basis and therefore the costs estimated in the feasibility stage need to be defended before the NEPRA.
Second Stage Tariff is filed for approval of NEPRA at the stage of finalization of EPC Contract of the Project. At this stage a Project developer is required to submit firm construction, maintenance, financial and development costs of the Project. The tariff finalized here is the eventual selling price of the electricity generated by the project after commercial operations date (“COD”) except for some pass through and adjustments required post completion of the Project.
Third Tariff is filed for adjustments of pass through items and admissible cost variations due to actual drawdowns of equity and disbursements by lenders of the Project. Moreover, material and labor cost variation is taken into account to adjust the tariff determined at the EPC Stage. This is the most important and extensive tariff of the Project.
We have extensive experience in this phase of the Project and we deeply understand the Tariff Mechanism of a power project at each of the above stages. We accurately understand the importance of a viable tariff for the success of the project and targets of the investors.