TAPAL ENERGY (PRIVATE) LIMITED

Corporate Office: F-25 • Block 5' Rojhan Street

Kehkashan • Clifton • Karachi - 75600 • Pakistan
Tel : +92-21-35876994 - 7
TAPAL Fax : +92-21 -35876991 & 35876993
ENERGY Email : [email protected]
THE REGISTRAR Date: 07th June, 2022
National Electric Power Regulatory Authority TEL/NEPRAIO 14/22
NEPRA Tower, G-5/1
Islamabad
Email: registrarnepra.org.pk
Tel: 051 920 6500

Dear Sir,

SUBJECT: SUBMISSION OF REFERENCE TARIFF PETITION AND REQUEST FOR GRANT OF

PROVISIONAL TARIFF - TAPAL ENERGY (PRIVATE) LIMITED 123.50 MW (NET)
PLANT AT DEH GONDPASS, TAPO GABOPAT, HUB RIVER ROAD, TALUKA &
DISTRICT KARACHI (WEST), KARACHI, PAKISTAN

We, TAPAL ENERGY (PRIVATE) LIMITED (a company duly established and existing
under the laws of Pakistan with its corporate office located at F 25, Block 5, Kehkashan,
Clifton, Karachi, Pakistan) (the "Licensee"), being the holder of generation license No.
IPGL/0 10/2003, submit to the NATIONAL ELECTRIC POWER REGULATORY AUTHORITY (the
"Authority"), for the Authority's kind consideration, an application (together with the
information and annexures attached thereto) for a new reference tariff (the "Reference Tariff
Petition"). The Reference Tariff Petition is to cater for sale of electricity from the Company's
126 (Gross) MW thermal power generation facility ("Facility") for an additional term of two
years (commencing on June 20, 2022) under the power purchase agreement with K- Electric
Limited ("KE") dated April 29, 2022 ("PPA") ("Application").

SUBMISSION OF REFERENCE TARIFF PETITION

2. In relation hereto, we certifr that the Application is prepared and submitted in

conformity with the applicable laws of Pakistan, including the 'Regulation of Generation,
Transmission and Distribution of Electric Power Act, 1997' (the "NEPRA Act") and its rules
and regulations, and we undertake and confirm that the information provided in the attached
documents-in-support is true and correct to the best of our knowledge and belief. The Reference
Tariff Petition (including its annexures) is submitted in triplicate, together with:

(a) a Bank Draft No. 01570318 dated June 07, 2022 amounting to PKR 1,869,444/-
(Pakistani Rupees One Million Eight Hundred Sixty Nine Thousand Four
Hundred and Forty Four only) drawn in favour of the Authority, as the
application fee for the Reference Tariff Petition (as communicated to the
Licensee by the Authority);

(b) board resolutjon of the Licensee; and

(c) statement of authorized representatives of the Licensee, the same being:

Registered Office :155-A • Street No.37 • Sector F-lU-i • Islamabad • Pakistan • Tel: +92-51-2321191 • Fax: +92-51-2321193
Plant : Deh-Gondpass • Tape Gabopat • Hub River Road • Taluka & District Karachi (West) • Karachi • Pakistan
Tel: +92-21-35205393 • Fax: +92-21-35205393 • Main Off Fax Extn : 301 Control Room Fax Extn :302
TA PAL
ENERGY
(i) MR. TABISH TAPAL (the chief executive officer of tcie Licensee); and

(ii) MR. MUSTAFA LAKDAWALA (the chief financial officer of the Licensee).

In light of the submissions set out in the Reference Tariff Petition and the information attached
to the same, the Authority is kindly requested to process the Application at the earliest, thereby
enabling the Licensee to proceed further.

WITHDRAWAL OF AN EARLIER TARIFF PETITION

3. The Company had previously requested the Authority for grant of a reference tariff to
cater for the extended term of its power purchase agreement vide: (i) a Tariff Petition dated
March 10, 2022; (ii) an addendum filed vide a 'communication' dated March 16, 2022; (iii) an
addendum filed vide a 'communication' dated April 27, 2022 (((i), (ii), (iii), hereinafter
collectively referred to as the "Earlier Petition").

4. Based on telephonic conversation with your good offices it came to our attention that
the Authority has taken a view that the Earlier Petition had some technical shortcomings,
therefore, in view of the above resubmission of the subject Reference Tariff Petition as a fresh
petition and in the interest of expediency in proceeding with the tariff proceedings the
Company hereby withdraws the Earlier Petition and its accompanying annexures.

REQUEST FOR GRANT OF A PROVISIONAL TARIFF

5. Pursuant to Rule 4(7) of the National Electric Power Regulatory Authority (Tariff
Standards and Procedure) Rules, 1998 ("Tariff Rules") the Company hereby requests the
Authority to exercise its powers and grant a provisional approval of tariff (the "Provisional
Tariff Approval") based on the Reference Tariff Petition. Such Provisional Tariff Petition will
allow the Company to continue the supply of power to KE during the period between the expiry
of its existing tariff (i.e. June 19, 2022) till the Authority arrives at its final determination with
regard to the Company's Reference Tariff Petition (the "Interim Period").

6. For ease of reference Rule 4(7) of the Tariff Rules is reproduced hereinbelow:

Rule 4'7,)- The Authority may, while admitting a petition, allow the immediate
application of the proposed tan if subject to an order for refund for the protection of
consumers, or for satisfactory security to be providedfor refund, while the
proceedings are pending before the Authority.

Given the above provisions in the applicable rules, the Authority may allow the
inmiediate application of the Reference Tariff Petition while the subject proceedings are
pending. The need for providing such a provisional tariff is detailed herein below.

7. The Company's present reference tariff (determined by the Authority vide tariff
determination dated No. NEPRAIRJSA(TariffTj/TRF-460/TEPL-2018/14643 dated June 9,

2
4

TAPAL
ENERGY
2020) is to expire on June 19, 2022 (the "Current Tariff"). The Company and KB have
executed the PPA, to cover the period permitted by the Current Tariff, with the option for
further extensions in the term. The Generation Licence of the Company (Generation Licence
No. IPGLI0l0/2003) already caters for the operations of the Company's facility till June 19,
2029. KB continues to be desirous of purchasing electricity from the Company after the lapse
of the Current Tariff and hence the Reference Tariff Petition is being filed.

8. Since the expiration of the Current Tariff is near i.e. in twelve days, the Company
requests the grant of the Provisional Tariff Approval for the Interim Period on an urgent basis
so that the Company can continue to supply electricity to KB.

9. It is emphasized, that during the peak months, the Facility runs as a base load plant for
IKE and dispatches at the capacity factor of 80% to 90% and plays a crucial role in the
contribution of power during Karachi's peak summer months. The Authority will note that the
Facility has been successfully operating for over two decades, catering for KB's consumer
requirements and has met its generation obligations for over 24 years. In addition to being a
reliable and consistent source of electricity, we also play a very significant role in the supply
of power to the west side of KB's transmission network, as our entire generation is supplied to
KB's grid stations of Baldia and Hub — both, critical power grids to major industrial and
commercial customers of KB.

10. KB has recognised our key role in contributing power and the Facility's critical part in
its embedded generation plan. In this regard, KB's letter no. BDIMZ/NEPRA-0680/2022-3005
dated June 2, 2022 is attached herewith demonstrating the crucial position of the Company's
facility in the KB distribution system.

11. The Company considers that the proposed tariff under the Reference Tariff Petition
takes into consideration present-day circumstances, current costs, such as current market
conditions, current costs of operations, actual operations, production and dispatch, as well as
recent technical assessments of the Facility. As detailed in the Reference Tariff Petition, KB
has drastically reduced the dispatch factor from 71% (as per the Current Tariff) to 30.3 8% for
the first year and 29.58% for the second year of the two years extended term. Therefore, for
the Company to be able to sustain itself and its Facility in the production of electricity, it is
humbly prayed that the Provisional Tariff Approval be based on the Reference Tariff Petition
which is in line with Rule 4(7) of the Tariff Rules which provides for immediate application of
the "proposed tariff'.

12. We hope that the Authority finds that we have adequately presented our case for the
grant of the Provisional Tariff Approval for the Interim Period, considering the upcoming
expiry of the Cun-ent Tariff and the needs of the city of Karachi and its citizens during the peak
sunrner months.

3
 TAPAL
ENERGY
PRAYER

13. In conclusion, we request:

(a) Admission of the subject Reference Tariff Petition by the Authority, in lieu of
withdrawal of the Earlier Petition; and

(b) Grant of the Provisional Tariff Approval for the Interim Period, on a priority basis to
avoid interruption of the supply of power from the Facility from June 20, 2022.

As always, the Company is available to provide any further assistance or address any further
queries, as required by the Authority.

Yours sincerely,

For and on behalf of

TAPAL ENERGY (PRIVATE) LIMITED

Mustala Lkdä1a
Chief Financial Officer

c.c: (Without Attachments)

(1) Mr. Muhammad Yousuf, Director Tariff, National Electric Power Regulatory
Authority NEPRA Tower, Attaturk Avenue (East), G-5/1, Islamabad, Pakistan.

(ii) Mr. Mudassir Zuberi, Head of Business Development, K- Electric Limited, KE

House, 39-B Sunset Boulevard, Phase II Defence Housing Authority Karachi,
Pakistan

4
+
TAPAL ENERGY (PRIVATE) LIMITED
Corporate Office: F-25 . Block 5. Rojhan Street
Kehkashan • Clifton • Karachi - 756OO Pakistan
±92-21 -35876994 - 7
TA PALL Fax :+92-21-35876991 & 35876993
ENERGY Email : [email protected]
CERTIFIED TRUE COPY OF RESOLUTION
OF THE BOARD OF DIRECTORS OF
TAPAL ENERGY (PRIVATE) LIMITED
PASSED ON APRILl5q 2022

"It is hereby unanimously resolved that:

(A) Tapal Energy (Private) Limited (a private company duly established and existing under
the laws of Pakistan with its registered office located at 155-A, Street no. 37, Sector F-
10/1, Islamabad, Pakistan) (the "Company"), being currently in the process of extending
the culTent term of the power purchase arrangement by two (2) years (the "Two Year PPA
Term Extension") (on such terms as are mutually agreed and subsequently approved by
the board of directors of the Company (the "Board") to be executed with K-Electric
Limited (a public limited company duly established and existing under the laws of
Pakistan with its registered office located at KE House, 39B, Sunset Boulevard, Phase-IT,
Defence Housing Authority, Karachi, Pakistan) ("KE") in respect of its 126 MW (Gross)
thermal power generation facility located at Deh Gondpass, Tapo Gabopat, Hub River
Road, Taluka & District Karachi (West), Karachi, Sindh, Pakistan, Be And Is Hereby
Authorized to prepare, finalize, deliver, file, apply, submit, and further pursue pursuant
to the applicable laws of Pakistan, including the 'Regulation of Generation, Transmission
and Distribution of Electric Power Act, 1997' (the "NEPRA Act") and the rules and
regulations made thereunder (the "Applicable NEPRA Laws"), a tariff petition (together
with all documents attached thereto) (the "Tariff Petition") before the National Electric
Power Regulatory Authority (the "Authority") for the Authority's approval and in
relation thereto, enter into and execute all required documents, make all filings, attend all
hearings, provide all required information and pay all applicable fees, in each case, of any
nature whatsoever.

(B) Further Resolved That, in respect of the matters relating to the Tariff Petition, Mr. Tabish
Tapal (being the chief executive officer of the Company and having CNIC No 423 01-
2385O59-9) and Mr. Mustafa Lakdawala (being the chief, financial officer of the
Company and having CNIC No 42201-31403j5-9) Be And Are Hereby singly and jointly
appointed as authorized representatives of the Company and are Hereby authorized and
empowered for and on behalf of the Company, as the Company duly appointed
Authorized Representatives, to address, perform, negotiate, decide, execute, implement
andlor undertake all matters of any nature whatsoever in relation to the Tariff Petition
including, without limitation:

(i) review, execute, submit, and deliver the Tariff Petition and any related documentation
required by the Authority for its approval of the Tariff Petition including an

Registered Office: 155-A • Street No. 37 • Sector F-lU-i • Islamabad • Pakistan • Tel: +92-51-2321191 • Fax: +92-51-2321193
Plant : Deh-Gondpass • Tapo Gaboat • Hub River Road • Taluka & District Karachi (West) • Karachi • Pakistan
let : +92-21-35205393 • Fax: + 92-21-35205393 • Main Off Fax Extn : 301 Controi Room Fax Extn : 302
Page I1
TAPAL
ENERGY
contracts, documents, powers of attorney, affidavits, statements, letters, forms,
applications, deeds, guarantees, undertakings, approvals, memorandum,
amendments, letters, communications, notices, certificates, request statements and
any other instruments of any nature whatsoever;

represent the Company in all negotiations, representations, presentations, hearings,

conferences and/or meetings of any nature whatsoever with any entity (including, but
in no manner limited to the Authority, KE, any private parties, companies,
partnerships, individuals, governmental andlor semi-governmental authorities and
agencies, ministries, boards, departments, regulatory authorities and/or any other
entity of any nature whatsoever);

sign, execute and deliver, for and on behalf of the Company, all necessary
documentation (including any contracts, documents, powers of attorney, affidavits,
statements, letters, forms, applications, deeds, guarantees, undertakings, approvals,
memorandum, amendments, letters, communications, notices, certificates, request
statements and any other instruments of any nature whatsoever), pay the necessary
fees, appear before any entity (including the Authority, KE, any private parties,
companies, partnerships, individuals, governmental and/or semi-governmental
authorities and agencies, ministries, boards, departments, regulatory authorities
andlor any other entity of any nature whatsoever), as required from time to time, and
do all acts necessaiy for processing and further approval of the reference tariff, as
applied pursuant to the Tariff Petition, by the Authority;

(iv) further sub-delegate any or all of the aforementioned powers and authorities to one or
more officers of the Company or any other person or persons, singly and/or jointly;
and,

(v) do all such acts, deeds and things as may be necessary for carrying out the purposes
aforesaid and give full effect to the above resolutions.

(C) Further Resolved That this resolution supersedes the resolution dated March 2022
previously passed on this subject.

Mus i akdaw
Company Secretary

Page I 2
 F086769

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Lice No. 02 G-l4, Spanish No.rne
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Issuea To With A(ic(re55 'dt dci. -161 ,mcJt

Tnrough With Address
1- UI pose
ValueRs Attached,.
Stamp Vendots Siqnature ' '-

(NOT USE FOP FREE WILt. l DIVORCE PURPOS1

BEFORE

THE NATIONAL ELECTRIC POWER REGULATORY AUTHORITY

AFFIDAVIT of MUSTAFA LAIAWALA, son ofAbid Hussain Lakdawala, resident of 14/A, Block 7/8 Overseas Housing
Society, Ameer Khusro Road, Karachi and holding CNIC No. 4220L-3 1403 75-9 (the "Deponent"), being the 'CHIEF
FINANCIAL OFFICER' of TAPAL ENERGY (PRIVATE) LIMITED (a company duly established and existing under tile laws
ofPakistan ii'ith its corporate office located at F-25, Block 5, Rojhan Street, Kehkashan, Cl(flon, Karachi, Pakistan).

1, the above-named Deponent, do hereby solemnly affirm and declare that:

(a) I am the 'CHIEF FINANCIAL OFFICER' of TAPAL ENERGY (PRIVATE) LIMiTED (a company duly established and
existing under the laws of Pakistan with its corporate office located at F-25, Block 5, Rojhan Street, Kehkashan,
C4fion, Karachi, Pakistan) (the "Petitioner").

(b) For the purposes of preparation, finalization, submission and filing (including all matters in respect of the same),
on behalf of the Petitioner, of the accompanying tariff petition (including all supporting documents attached
thereto) dated ne 07 ~_o 72. (the "Tariff Petition") before the NATIONAL ELECTRIC POWER
REGULATORY AUTHORiT' (the "Authority") and for the purposes of further representing the Petitioner and
performing all acts and deeds, on bellaif of the Petitioner, in respect of the Tariff Petition, I am the principal
authorized representative/attorney of the Petitioner in tenns of the authority and powers vested in and conferred on
me, the Deponent, vide the duly passed resolution(s) of the board of directors (the "Board") of the Petitioner dated
April 15, 2022.

(c) The contents of the accompanying Tariff Petition are true and correct to the best of my knowledge and belief, and
nothing material or relevant thereto has been concealed or withheld therefrom.

(d) All further documentation and information to be provided by me, the Depoxent, on behalf of the Petitioner, in
connection with the aforesaid Tariff Petition shall be true and correct to the best of my knowledge and belief.

NT
VERIFICATION

It is hereby verified on solemn affirmation at Karachi, Pakistan on this, 7 , 2_. that the contents of the
above Affidavit are true and corred to the best of my knowledge and belief, and that nothing material or relevant
thereto has been concealed or withheld therefrom to the best of my knowledge and belief.
<-7
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 U86.7 0 11111\ 1fl\ 11111i111

STPMP \JENDOFt
.icerè o. t12
17 MAY Z2
Date
,sueo ToWith.AtdiB
urotigh With Adiirc'55
ifipOso
BEFORE
'alue Rs
;tamp Vndots Signature
THE NATIONAL ELECTRIC POWER REGULATORY AUTHORITY
NOT USE FOP FREE WILI & DIVORCE rn;RP
AFFIDAVIT of TADISFI TAPAL, son of Moiz S. Tapal, resident of 33-B, 3r1 Gizri. Street, Phase lv, DHA, Karachi and
holding NIC No. 42301-2385059-9 (the "Deponent"), beii the 'CHIEF ExEiUTIVE OFFIcER' of TAPAL ENERGY
(PRIVATE) LIMITED (a company duly established and existi, nder the laws of Pakistan with its corporate office
located at F-25, Block 5, Rojhan Street, Kehkashan, Clfion, Karas!ii, POkistan )..

I, die above-named Deponent, do hereby solemnly affirm and declare that:

(a) I am the 'CHIEF EXECUTIVE OFFICER' of TAPAL ENERGY (PRIVATE) LIMITED (a company duly established and
existing under the laws of Pakistan with its cori,orte office located at F-25, Block 5, Rojhan Street, Kehkashan,
Clflon Karachi, Pakistan) (the "Petitioner").

(b) For the purposes of preparation, finalization, submission and filing (including all matters in respect of the same),
on behalf of the Petitioner, of the accompanying tariff petition (including all supporting documents attached
thereto) dated (the "Tariff Petition") before the NATIONAL ELECTRIC POWER
1EGULATORY AUTHORITY (the "Authority") and for the purposes of fuither representing the Petitioner and
performing all acts and deeds, on behalf of the Petitioner, in respect of the Tariff Petition, I am the principal
authorized representative/attorney of the Petitioner in terms of the authority and powers vested in and conferred on
me, the Deponent, vide the duly passed resolution(s) of tl board ofdirectors (the "Board") of the Petitioner dated
April 15, 2022.

() The contents of the accompanying Tariff Petition re t:i :t.t0the best of my knowledge and belief, and
nothing material or relevant thereto has bee:i conccalc .wiftoelt therefrom.

(d) All further documentation and information to be provided by me, the Deponent, on behalf of the Petitioner, in
connection with the aforesaid Tariff Petition shall be true and correct to the best of my knowledge and belief.

DEPONENT
VER1rrcA1'IoN

(e) It is hereby verified on solemn affirmation at Karachi, Pakistan on this L,ig 07 2O2.7— , that the contents of
the above Affidavit are true and correct to the best of my knowledge and belief, and that nothing material or relevant
thereto has been concealed or withheld therefrom to the best of my knowledge and belief.

'V
DEPONENT
The Registrar, BD/MZ/NEPRA-0680/2022-3005
National Electric Power Regulatory Authority ("NEPRA") June 2, 2022
N EPRA Tôwe r, Attaturk Avenue (East)
Sector G-5/1, Ilamabad

Subject: Request for Provisional Approval of the Tariff Petition Filed by Tapal Energy (Pvt.)
Limited (TEL)
Dear Sir,

We write with reference to the tariff petition filed by TEL dated March 10th, 2022, and subsequently
revised through its letter no. TEiJNEPRAJO1O/22 dated April 27th, 2022, for approval of tariff petltion. for
two year extension in term of Power Purchase Agreement (PPA) with K-Electric Limited (IKE) which is
currently set to expire on June 19th, 2022.

Considering the growth in power demand on IKE grid and the timing of additional supply from National
Grid, there isa compelling need for KE to cover the demand shortfall in the interim period of,FY-23 and
FY-24 through based load power plants. While IKE remains committed to the addition of new and efficient
generation in its system, the long gestation period of developing new projects does not allow KE to cover
the shortfall in interim period.

In view of the above,. IKE has agreed with TEL on extension of existing PPA for the next two years. on take
and pay basis in order to overcome any uncertainties and untoward delays in project timelines and/or the
commissioning of the interconnection facilities. Furthermore, as also observed during this summer, there
is a risk that NTDC may reduce its power supply to IKE during. FY-23 and FY-24 due power shortage in the
National Grid, and untit such time as our aforementioned power supply options are commissioned, this
extension will provide the required contingency in supply to IKE against any potential adverse
circumstances.

Accordingly, we hereby request the Authority to please consider the tariff petition filed by TEL for
extension of another 2 years before the PPA expiry on June 19th, 2022 to ensure uninterrupted supply
from TEL in peak summer days.

Sincerel

Mudassirbe I
Head of Business Development

* RE House, 39-B, Sunset.Boulevard, Phase-Il, Defence I-lousing Authority. Karachi

Ii! wwwke.com.ok © 92-21-3263-713. 92-21-3870-9132, UAN: 111-537-211
 BEFORE
THE NATIONAL ELECTRIC POWER REGULATORY AUTHORITY (NEPRA)

TARIFF PETITION
FOR
REFERENCE GENERATION TARIFF

PURSUANT TO
ENABLING PROVISIONS OF NEPRA ACT 1997
READ WITH ENABLING PROVISIONS OF
RULES & REGULATIONS MADE THEREUNDER

ON BEHALF OF

TAPAL ENERGY (PRtVATE) LIMITED

FOR NEPRA's APPROVAL OF REFERENCE GENERATION TARIFF

FOR
TAPAL ENERGY (PRIVATE) LIMITED

RELATING TO A THERMAL POWER GENERATION FACILITY OF 126 MW (GRoss)

LOCATED AT

DEH GONDPASS, TAPO GABOPAT, HUB RIVER, TALUKA & DISTRICT KARACHI (WEST), KARACHI,
SINDH, PAKISTAN

DATED: JUNE 7, 2022

LEGAL & REGULATORY CONSULTANT COMPANY

I{AIDERMOTA & Co. TAPAL ENERGY (PRIVATE) LIMITED

KARACHI OFFICE CORPORATE OFFICE

PLOT 1010,4Th FLOOR, AL MURTAZA F 25, BLOCK 5, CLIFTON
LANE 1, PHASE VIII, DEFENCE HOUSING KARACHI, PAKISTAN.
AUTHORITY KARACHI, PAKISTAN TEL: +92-21-35876994
TEL: +92-21-111520000 FAx: +92-21-35876991
FAx: +92-21-35871054 EMAIL: [email protected]
EMAIL: [email protected]
 TABLE OF CONTENTS

1. DETAJLSOFCOMPANY 14
2. INTRODUCTION TO COMFANY & THE PROJECT 16
3. BACKGROUND TO THIS TARIFF PETITION 20
4. THE FACILITY 24
5. THE GENERATION LICENSE 27
6. KEY CONSIDERATIONS 29
7. REFERENCE GENERATION TARIFF SUMMARY 32
8. ENERGY CHARGE 34
9. CAPACITY CHARGE 39
10. CRITICAL ADJUSTMENTS & PASS THROUGH ITEMS 44
11. GENERAL ASSUMPTIONS 46
12. CONCLUSION 48
 GLOSSARY

TERM DEFIN1TON
1994 Power Policy 'Policy Framework and Package of Incentives for Private Sector
Power Generation Projects in Pakistan' dated March 1994.
Applicable NEPRA NEPRA Act and rules and regulations made thereunder.
Laws
Authority National Electric Power Regulatoiy Authority.
AVS Ameejee Valleejee & Sons (Pvt.) Limited.
Board The board of directors of the Company.
BOO Build Own Operate.
Capacity Charge The capacity charge component of the Reference Generation Tariff.
Company Tapal Energy (Private) Limited, a company duly established and
existing under the laws of Pakistan with its corporate office located at
F 25, Block 5, Clifton, Karachi, Pakistan and its registered office
located at 155-A, Street No. 37, Sector F-loll, Islamabad, Pakistan.
Cost of Working The working capital cost component of the Capacity Charge.
Capital Component
CPI Consumer Price Index.
Energy Charge The energy charge component of the Reference Generation Tariff.
EPC Engineering, procurement and construction.
Extension June 20, 2022.
Commencement Date
Facility The Company's 126 MW (Gross) thermal jower generation facility
located at the Site.
FJFO First In First Out. -
Fixed O&M Cost The fixed operations and maintenance cost component of the
Component Capacity Charge.
Fuel Cost Component The fuel component of Energy Charge.
Generation License Generation license No. IPGLIO1O/2003 issued by the Authority to the
Company on August 26, 2003, attached as ANNEXURE F (COPY OF
GENERA TIONLICENSE).
Generation License Application dated May 22, 2018 submitted by the Company to the
First Modification Authority for modification of the Generation License.
Application
3oP The Government of Pakistan.
GST General Sales Tax.
Insurance Cost The insurance cost component of the Capacity Charge.
Component
JPPs Jidependent power producers.
KE 1K-Electric Limited, a public limited company established and existing
under the laws of Pakistan with its registered office atKE House, 39-
B, Sunset Boulevard, Phase-Il, Defence Housing Authority, Karachi,
;Pakistan. .
KE Capacity Factor KB's e-mail dated Februaty 18, 2022 andeni.ildated April22, 2022
Confirmation .for confirmation of first and second extension year dispatch factor
attached as ANNEXURE E & E-1 (KE CA PA CITY FA CTOR
'CONFIRMATION)
KB Power Purchase 'KB's letter dated December 6, 2021 bearing reference No.
Consent .CEOSECJ99_061221 for consent of one year extension and KE's
letter dated April 13, 2022 bearing reference No.
CEOSEC_247j3 042022 for consent of two year extension, attached
as ANNEXURE D (KEPOWER PURCHASE CONSENT).

3
KIBOR Karachi Inter Bank Offered Rate.
LHV Lower Heating Value.
Marubeni Marubeni Corporation, a general trading company existing tinder the
laws of and headquartered in Nihonbashi, Chuo, Tokyo, Japan.
NEPRA Act Regulation of Generation, Transmission and Distribution of Electric
Power Act, 1997.
NEPRA First Authority's approval dated November 20,2018 bearing reference No.
Modification Approval NEPRA/R/LAG-.l'1/18273-79 in relation to the Company's
Generation License First Modification Application, attached as
ANN EXURE G (NEPRA FIRSTMODIFICA TIONAPPROVAL).
NEPRA Second Authority's approval dated March 9, 2020 bearing reference No.
Modification Approval NEPRA/RJLAG-1 1/7639-44 in relation to the Company's Generation
License First Modification Application, attached as ANNEXURE G-1
NEPRA SECOND MODIFIcA TIONAPPRO I/AL).
O&M Operations and maintenance.
Original Power Power Purchase Agreement dated September 26, 1995 executed
Purchase Agreement between KE and the Company.
Reference Date January 31, 2022.
Reference Generation The tariff to be approved, granted and determined by the Authority
Tariff pursuant to the Petition.
Reference Generation The Reference Generation Tariff Table as set out in Section 7.3 and
Tariff Table ANNEXURE H REFERENcE GENERATION TARIFF TABLE).
RFO Residual Fuel Oil.
ROE Return on Equity.
RULA Remaining useful life assessment.
RULA Study Report 'Remaining Useful Life Assessment (RULA) Study Report' dated
October 1,2018 commissioned by M/s Continental Marine Energy
Sdn Bhd (CME), Malaysia.
Site Deh Gondpass, Tapo Gabopat, Hub River Road, Taluka & District
Karachi (West), Karachi, Sindh, Pakistan.
SML Sithe Mauritius Limited, a private limited company set up and 100%
owned (as an investment holding company) by Marubeni
Corporation.
Specific FMEs Has the meaning given to it in paragraph 10.2.1.
Tariff Determination Authority's tariff determination dated June 9, 2020 bearing reference
No. NEPRA/R/SA(Tariff/TRF-460/TEPL-2018/14643.
Tariff Petition This tariff petition being filed by the Company for approval and grant
of a reference generation tariff for the Facility.
Three Year Extension Has the meaning given to it in paragraph 2.2.9.
Term PPA
Two Year Extension The 73 1 day period commencing from June 20, 2022.
Term PPA
Variable O&M Cost The variable O&M component of the Energy Charge.
Component
USD United States Dollar.

4
 CoPY OF
AFFIDAVITS OF AUTHORIZED REPRESENrITATIVES OF
TAPAL ENERGY (PRIVATE) LIMITED

5
 F086769 I I I II1IIII13IIIU IIIIflI 1

cs-m ZA 5TMiP VENDOR 11 MAY Z?

Lhe No. 02 G-l4, Snsl Houe's
iarach.
I ijUwlIJI
S.ri,
Issuea To Willi A(;dre5 Lde, Mci. 11flibIt
urirough With Address
pose
ValueRs Atlached
L.L__.
Stamp Vendots Signature
(NOT uSE FOR FREE WILE P, DIVORCE PURPOS BEFORE

• THE NATIONAL ELECTRIC POWER REGULATORY AU1ITORITY

AFFIDAVIT of MUSTAFA LAKDAWALA, son ofAbid Hussain Lakdawala, resident of 14/A, Block 7/8 Overseas Housing
Society, Ameer Khusro Road, Karachi and holding CNIC No. 42201-3140375-9 (the "Deponent"), being the 'CHIEF
FINANCIAL OFFICER' of TAPAL ENERGY (PRIVATE) LIMITED (a company duly established and existing under the laws
of Pakistan with its corporate office located at F-25, Block 5, Rojhan Street, Kehkashan, Clflon, Karachi, Pakistan).

I, the above-named Deponent, do hereby solemnly affirm and declare that:

(a) I am the 'CHIEF FINANCIAL O!FICER' of TAPAL ENERGY (PRIVATE) LIMITED (a company duly established and
existing under the laws of Pakistan with its corporate office located at F-25, Block 5, Rojhan Street, Kehkashan,
Clfion, Karachi, Pakistan) (the "Petitioner").

(b) For the purposes of preparation, finalization, submission and filing (including all matters in respect of the same),
on behalf of the Petitioner, of the accompanying tariff petition (including all supporting documents attached
thereto) dated 07 ~.o (the "Tariff Petition") before the NATIONAL ELECTRIC POWER
REGULATORY AUTLIORIT (the "Authority") and for the purposes of further representing the Petitioner and
performing all acts and deeds, on behalf of the Petitioner, in respect of the Tariff Petition, I am the principal
authorized representative/attorney of the Petitioner in teniis of the authority and powers vested in and conferred on
me, the Deponent, vide the duly passed resolution(s) of the board of directors (the "Board") of the Petitioner dated
April 15, 2022.

(c) The contents of the accompanying Tariff Petition are true and correct to the best of my knowledge and belief, and
nothing material or relevant thereto has been concealed or withheld therefrom.

(d) All further documentation and information to be provided by me, the Deponent, on behalf of the Petitioner, in
connection with the aforesaid Tariff Petition shall be true and correct to the best of my knowledge and belief.

NT
VERIFICATION

It is hereby verified on solemn affirmation at Karachi, Pakistan on this, ,7 7 ,. -• that the contents of the
above Affidavit are true and correct to the best of my knowledge and belief, and that nothing material or relevant
thereto has been concealed or withheld therefrom to the best of my knowledge and belief.

D
Il.
 I I 1 UII1I1 1U% III

' STAMP VENDON

' ii MAY 2Z2
DO .,f Date tc11i)mc1ktii
tsueo ToWih.ldr
tirough With Addr&SS
ci! p050 ---- BEFo1u.
'alue Rs Attached I .:
,tamp VenOm's Signature
NOT USE FOR FOEE WILL & OIVOPCE PIRP1'
THE NA FIONAL ELECTRIC POWER REGULATORY AUTHORITY

AITIDAvrr of TABISEI TAPAL, son of Moiz S. Tapal, resident of 33-B, 3 Oizri Street, Phase IV, DI-IA, Karachi and
holding CNIC No. 42301-2385059-9 (the "Deponent"), beii, the 'CFIIEF EXECUTIVE OFFICER' of TAPAL ENERGY
(PRIVATE) LIMITED (a company duly established and exist f, 0' ,nder the laws of Pakistan with its corporate office
located at F-25, Block 5, Rojhan Street, Kehkashan, C4flo;z, Karachi, Pakistan).

I, the above-named Deponent, do hereby solemnly affirm and declare that:

(a) I am the 'CHIEF EXECUTIVE OFFICER' of TAPAL. ENERGY (PRIVATE) LIMITED (a company duly established and
existing under the laws of Pakistan with its corporcte office located at F-25, BlockS, Rojhan Street, Kehkashan,
Clflon, Karachi, Pakistan) (the "Petitioner").

(b) For the purposes of preparation, finalization, submission and filing (including all matters in respect of the same),
on behalf of the Petitioner, of the accompanying tariff petition (including all supporting documents attached
thereto) dated E'p, 7 (the "Tariff Petition") before the NATIONAL ELECTRIC POWER
REGULATORY AUTHORITY (the "Authority") and for the purposes of further representing the Petitioner and
performing all acts and deeds, on behalf of the Petitioner, in respect of the Tariff Petition, I am the principal
authorized representative/attorney of the Petit joner in terms of the authority and powers vested in and conferred on
me, the Deponent, vide the duly passed resolution(s) of thg board of directors (the "Board") of the Petitioner dated
April 15, 2022.

(c) The contents of the accompanying Tariff Petition .ret:! ct to the best of my knowledge and belief, and
nothing material or relevant thereto has bee:i oonccalcJ iwloel therefrom.

(d) All further documentation and information to be provided by me, the Deponent, on behalf of the Petitioner, in
connection with the aforesaid Tariff Petition shall be true and correct to the best of my knowledge and belief.

DEPONENT
VERIFICATION

(e) It is hereby verified on solemn affirmation at Karachi, Pakistan on this Q7 2027— , that the contents of
the above Affidavit are true and correct to the best of my knowledge and belief, and that nothing material or relevant
thereto has been concealed or withheld therefrom to the best of my knowledge and belief.

A'1t'
'V
DEPONENT

r'

i k .
 CoPY OF EXTRACT OF
RESOLUTION PASSED BY
.BOARD OF DIRECTOR OF
TAPAL ENERGY (PRIVATE) LIMITED

$
 TAPAL ENERGY (PAl VAlE) LIMITED
Corporate Office: F-25 • Block 5. Rojhan Street
Kehkashan • Clifton • Karachi - 75600 • Pakistan
Tel. : +92-21-35876994 - 7
TAPAL Fax : +92-21-35876991 & 35876993
ENERGY Email : [email protected]
CERTIFIED TRUE COPY OF RESOLUTION
OF THE BOARD OF DIRECTORS OF
TAPAL ENERGY (PRIVATE) LIMITED
PASSED ON APRIL15, 2022

"It is hereby unanimously resolved that:

(A) Tapal Energy (Private) Limited (a private company duly established and existing under
the laws of Pakistan with its registered office located at 155-A, Street no. 37, Sector F-
10/1, Islamabad, Pakistan) (the "Company"), being currently in the process of extending
the current term of the power purchase arrangement by two (2) years (the "Two Year PPA
Term Extension") (on such terms as are mutually agreed and subsequently approved by
the board of directors of the Company (the "Board") to be executed with K-Electric
Limited (a public limited company duly established and existing under the laws of
Pakistan with its registered office located at KE House, 39-B, Sunset Boulevard, Phase-IT,
Defence Housing Authority, Karachi, Pakistan) ("KE") in respect of its 126 MW (Gross)
thermal power generation facility located at Deh Gondpass, Tapo Gabopat, Hub River
Road, Taluka & District Karachi (West), Karachi, Sindh, Pakistan, Be And Is Hereby
Authorized to prepare, finalize, deliver, file, apply, submit, and further pursue pursuant
to the applicable laws of Pakistan, including the 'Regulation of Generation, Transmission
and Distribution of Electric Power Act, 1997' (the "NEPRA Act") and the rules and
regulations made thereunder (the "Applicable NEPRA Laws"), a tariff petition (together
with all documents attached thereto) (the "Tariff Petition") before the National Electric
Power Regulatory Authority (the "Authority") for the Authority's approval and in
relation thereto, enter into and execute all required documents, make all filings, attend all
hearings, provide all required information and pay all applicable fees, in each case, of any
nature whatsoever.

(B) Further Resolved That, in respect of the matters relating to the Tariff Ptition, Mr. Tabish
Tapal (being the chief executive officer of the Company and having CNIC No 42301-
2385059-9) and Mr. Mustafa Lakdawala (being the chief financial officer of the
Company and having CNIC No 42201-31403j5-9) Be And Are Hereby singly and jointly
appointed as authorized representatives of the Company and are Hereby authorized and
empowered for and on behalf of the Company, as the Company duly appointed
Authorized Representatives, to address, perform, negotiate, decide, execute, implement
and/or undertake all matters of any nature whatsoever in relation to the Tariff Petition
including, without limitation:

(i) review, execute, submit, and deliver the Tariff Petition and any related documentation
required by the Authority for its approval of the Tariff Petition including any,

Registered Oice:155-A • Street No.37 • Sector F-lU-i • tslamabad • Pakistan • Tel: +92-51-2321191 • Fax: +92-51-2321193
Plant : Deh-Gondpass • Tapo Gabopat • Hub River Road • Taluka & District Karachi (West) • Karachi • Pakistan
Page 1
Tel: +92-21-35205393 • Fax: +92-21-35205393 • Main Oft Fax Extn :301 Control Room Fax Extn :302
 TAPAL
ENERGY
contracts, documents, powers of attorney, affidavits, statements, letters, forms,
applications, deeds, guarantees, undertakings, approvals, memorandum,
amendments, letters, communications, notices, certificates, request statements and
any other instruments of any nature whatsoever;

(ii) represent the Company in all negotiations, representations, presentations, hearings,

conferences and/or meetings of any nature whatsoever with any entity (including, but
in no manner limited to the Authority, KE, any private parties, companies,
partnerships, individuals, governmental and/or semi-governmental authorities and
agencies, ministries, boards, departments, regulatory authorities and/or any other
entity of any nature whatsoever);

(iii) sign, execute and deliver, for and on behalf of the Company, all necessary
documentation (including any contracts, documents, powers of attorney, affidavits,
statements, letters, forms, applications, deeds, guarantees, undertakings, approvals,
memorandum, amendments, letters, communications, notices, certificates, request
statements and any other instruments of any nature whatsoever), pay the necessary
fees, appear before any entity (including the Authority, KE, any private parties,
companies, partnerships, individuals, governmental and/or semi-governmental
authorities and agencies, ministries, boards, departments, regulatory authorities
and/or any other entity of any nature whatsoever), as required from time to time, and
do all acts necessary for processing and further approval of the reference tariff, as
applied pursuant to the Tariff Petition, by the Authority;

(iv) further sub-delegate any or all of the aforementioned powers and authorities to one or
more officers of the Company or any other person or persons, singly and/or jointly;
and,

(v) do all such acts, deeds and things as may be necessary for carrying out the purposes
aforesaid and give full effect to the above resolutions.

(C) Further Resolved That this resolution supersedes the resolution dated Pt March 2022
previously passed on this subject.

MusfafaLkda,v
Company Secretary

Page I 2
 SEcTION 1
DETAILS OF COMPANY

13
1. DETAILS OF COMPANY

1.1 NAME & ADDRESS

TAPAL ENERGY (PRIVATE) LIMITED

F-25, Block 5, Clifton Karachi
Pakistan
Tel: +92-21-35876994
Fax: +92-21-35876991

1.2 AUTHORIZED REPRESENTATIVES

1.2.1 MR. TABISH TAPAL

Chief Executive Officer,
Tapal Energy (Private) Limited.
Email: [email protected]
Mobile: +92 300 8220960

1.2.2 MR. MUSTAFA LAKDA WA LA

Chief Financial Officer,
Tapal Energy (Private) Limited.
Email: rnustafatapalenergy.com .pk
Mobile: +92 300 8292078

14
 SECTION 2
INTRODUCTION TO THE COMPANY
&
THE PROJECT

15
2. INTRODUCTION TO Corw&r & 'rmi PROJ1CT

2.1 THE COMPANY& PROJECT DEVELOPMENT BACKGROUND

TAPAL ENERGY (PRIVATE) LIMITED (a company duly established and existing under the laws of
Pakistan with its corporate office located at F 25, Block 5, Clfion, Karachi, Pakistan and its
registered office located at 155-A, Street No. 37, Sector F-JO/i, Islainabad, Pakistan) (the
"Company"), being the petitioner under this tariff petition ("Tariff Petition") for approval and
grant of a reference generation tariff ("Reference Generation Tariff'), was set up and established
on March 1, 1995 for the purposes of undertaking the project (the "Project") relating to the
development, setting up, implementation, construction and operation of a 126 MW (Gross) thermal
power generation facility (the "Facility") located at Deh Gondpass, Tapo Gabopat, Hub River
Road, Taluka & District Karachi (West), Karachi, Sindh, Pakistan (the "Site").

2.1.1 The Company's shareholding pattern and constitutional documents are attached herewith as
follows:

(i) ANNEXURE A S/:areholding Patter,:);

(ii) ANNEXURE B (Memorandum and Articles ofAssociation); and

(iii) ANNEXURE C (CertjfIcate of Incorporation).

2.1.2 The Project is being undertaken and implemented pursuant to the Government of Pakistan's (the
"GoP") 'Policy Framework and Package of Incenlives for Private Sector Power Generation
Projects in Pakistan' formulated in March 1994 (the "1994 Power Policy"). Key milestones
relating to the developmental phase of the Project are noted below:

:.MILESTONE::.: ............................: . :: DATE OFACHIEVEMENT ::.:..

Submission of application June 16, 1994
Issuance of Letter of Interest June 28, 1994
Issuance of Letter of Support September 18, 1994
Date of Financial Closing April 18, 1996
Commissioning Date June 20, 1997

2.1.3 The Company initially procured a license in January 1997 under the Eleotricity Act, 1910. Later,
the Company obtained a generation license No. IPGL/010/2003 dated August 26, 2003 (the
"Generation License") from the National Electric Power Regulatory Authority ("Authority")
under the 'Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997'
(the "NEPRA Act") and the rules and regulations made thereunder. Further details of the
Generation License and modifications therein are mentioned in Section 5 (The Generation License)
below.

2.2 THE CONTRACTUAL ARRANGEMENTS

2.2.1 For the purposes of developing the Project under the 1994 Power Policy, the Company entered into,
inter cilia, the following contractual arrangements:

CONTRACTUALARRANGEMENT...:..,............. DATE OFEXECUTION •.:.-::

IMPLEMENTATION AGREEMENT August 8, 1995
ORIGINAL POWER PURCHASE AGREEMENT September 26, 1995
FUEL SUPPLY AGREEMENT March 7, 1996
GOP GUARANTEE April 18, 1996

2.2.2 In addition, the Company also entered into:

(i) engineering, procurement and construction ("EPC") arrangements for the Facility with world-
class EPC contractors / suppliers, such as Holland's Power Construction Company BV and
Finland's Wartsila Diesel and ABB Industry; and

16
 (ii) operations and maintenance ("O&M") arrangements with Wartsila Diesel Pakistan (Private)
Limited and subsequently with Sithe Mauritius Power Services.

2.2.3 The Company, through its experienced and highly skilled in-house resources, has been operating
and maintaining the Project and the Facility (including its efficiency and reliability) since the
commissioning date. The successful operations of the Project and the Facility are a testament to the
Company's in-house team's excellence.

2.2.4 The power purchase agreement dated September 26, 1995 ("Original Power Purchase
Agreement") executed between the Company and K-Electric Limited (formerly Karachi Electric
Supply Corporation Limited, a public limited company duly established and existing under the laws
of Pakistan with its registered office located at KE House, 39-B, Sunset Boulevard, Phase-Il,
Defence Housing Authority, Karachi, Pakistan) ("IcE") in relation to the Project expired on June
19, 2019, following which the above framework of contractual arrangements also expired
therewith.

2.2.5 Considering the shortfall of power in KE's systems and based on the mutual agreement between
the Company and KE, KE issued a letter of interest to the Company to procure power from the
Company for a further period of 5 years through extending the term of their power purchase
arrangement.

2.2.6 Upon receipt of the letter of interest from KE:

the Company commissioned the 'remaining useful life assessment' ("RULA") to the
renowned engineering consultant, M/s Continental Marine Energy Sdn Bhd (CME), Malaysia,
who authored the 'Remaining Useful Life Assessment (RULA) Study Report' dated October
1,2018 ("RULA Study Report");

(ii) the Company filed the 'Licensee Proposed Modification of Generation License' before the
Authority vide its application dated November 29, 2018, seeking an extension of 10 years in
the term of the Generation License; and

(iii) the Company applied for a cost-plus tariff for a 5 year power purchase agreement extension
term vide its tariff petition No. TEL/NEPRAI011/1 9 dated December 7, 2018 before the
Authority.

2.2.7 Considering the remaining useful life of the plant and satisfactory performance of the Company,
the Authority extended the term of the Generation License for 10 years, that is up to June 19, 2029
vide approval No. NEPRA/RJLAG-1 1/7639-44 dated March 9, 2020.

2.2.8 Additionally, after a series of applications and review requests filed by the Company, the Authority
issued its tariff determination No. NEPRAJR/SA(Tariff/TRF-460/TEPL-2018/14643 dated June
9, 2020 for a 3-year powr purchase agreement extension term ("TariffDeterminatioii") as against
the Company's request for 5 years.

2.2.9 Subsequently, KB and the Company negotiated and finalized a power purchase agreement which
was provisionally approved by the Authority on August 4, 2021. However, signing of the said
power purchase Agreement was pending for want of a clarification requested by the Company from
the Authority vide its letter No. TELINEPRA/003/21 dated September 17, 2021. The required
clarification was provided by the Authority vide its letter No. NEPRA/Consultant (RE/Tech)/LAD-
01/2914-15 dated February 21, 2022, following which KE and the Company are now in the process
of finalizing and executing the said power purchase agreement (the "Three Year Extension Term
PPA").

2.3 THE PROJECT SPONSORS

2.3.1 TAPAL GROUP

THE TAPAL GROUP, priiicipals Of AMEEJEE VALLEEJEE & SONS PVT.) LIMITED ("AVS") was
established in 1867. AVS has wide experience in the engineering and construction related activities
ranging from ship building to barge construction/repairs to power plants. It has iepresented some

17
 of the most renowned international companies such as ABB, Chint, Streinmuller, Lurgi, Standard
Kessel, 1-lenkels, Dorr Oliva, Atlas Copco etc. in Pakistan and has been instrumental in
development of the economy of the Pakistan. The Tapal Group currently holds 50% of the
shareholding in the Company and is responsible for the management of the Company.

2.3.2. SITHE MAuRmus LIMITED

SITHE MIAuRITIUS LIMITED ("SML") is a private limited company, an entity set up and 100%
owned (as an investment holding company) by MARUBENI CORPORATION ("Marubeni"). SML
currently holds 50% of the share capital in the Company.

Marubeni is one of the leading trading and investment houses of Japan that was founded in May
1858. It has total of 133 branches and offices, consisting of Head Office in Tokyo, 12 branches and
offices in Japan, 58 overseas branches and offices, and 29 overseas corporate subsidiaries
containing 33 branches and offices, and is involved in a broad range of sectors on global level
including, inter a/ia, power, food materials, food products, textiles, materials, pulp and paper,
chemicals, energy, metals and mineral resources and transportation machineiy. Marubeni has
45,470 employees within its group and total assets of around USD 61 billion.

Marubeni is very active in the power sector industry, it owns and operates 73 I(W)PP projects with
a total gross capacity of38,O31MW globally as of January 31, 2022.

Marubeni's role in the IPP business includes development, financing, equity participation as well
as engineering, procurement, and construction and operation and maintenance. Marubeni operates
IPP projects in around 19 countries around the world, including Pakistan, Taiwan, Indonesia,
Philippines, South Korea, Singapore, Oman, UAE, Saudi Arabia, Tunisia, Qatar, Portugal, Chile,
Trinidad and Tobago, Jamaica, and USA. In addition, Marubeni, through its EPC arm, Marubeni
Power & Infrastructure Systems Corporation, has delivered power plants in 56 countries, of which
aggregate generation capacity is 112,444MW as of March 31, 2021.

18
 SECTION 3
BACKGROUND To THIS TARIFF PETITION

19
3. BACKGROUND To Tins TARIFF PETITION

3.1 THE POWER PURCHASE AGREEMENT

3.1.1 For the purposes of, inter a/ia, sale of the power generated by the Facility and to set out the terms
and conditions relating to the same, the Company and KE finalized an agreement entitled 'POWER
PURCHASE AGREEMENT' (i.e. the Three Year Ektension Term PPA). It is highlighted, specifically
for the purposes of this Tariff Petition, that the current term of the said power purchase agreenent
as set out therein in terms of its Section 2.2 (Term), is 36 consecutive months commencing from
June 20, 2019, unless terminated earlier.

3.1.2 In addition, it is noted that the Three Year Extension Term PPA also contemplates a mechanism
for renewal of its term prior to its expily pursuant to Section 2.2(b) thereof, which states as follows:

"In the event that either Party. (0 requests for an extension of the Term under this
Agreement or proposes to execute a new. agreement with the other Party on
revised tarff upon expiry of the Term; the Parties shall, in each case, be required
to enter into discussions at least eight 8) Months before the expiry of this
Agreement and, approach NEPRA six (6) Months before the expiry of this
Agreement for necessamy approvals as required under the applicable Laws."

3.2 THE CONTEMPLATED EXTENSION OF THE TERM OF THE APPROVED EXTENSION TERM PPA

3.2.1 Considering, inter a/ia, that the Company has successfully operated itsFacility, has catered for
KE's consumer requirements by generating average around 735.962 per annum upto June 202,
and has met its generation obligations for over 24 years, the Company and KE (pursuant to Section
2.2(b) of the Three Year Extension Term PPA) have been engaged in discussions for extending the
term of the power purchase agreement for an additional period which shall commence on June 20,
2022 (the "Extension Commencement Date").

3.3 THE KE CONSENT

3.3.1 In response to the Company's request, KE has issued its consent vide KE's letter bearing reference
No. CEOSEC 199061221 dated December 6,2021 to purchase power for an additional 1 year. In
continuation to the KB letter bearing reference No. CEOSEC 199061221 dated December 6,
2021, KE subsequently issued a letter to the Company dated April 13, 2022 bearing reference No.
CEOSEQ.247_13 042022 requesting a further extension of the term, such that the additional term
of the power purchase arrangement between the Company and KB extends for two years i.e. till
June 19, 2024 ("Two Year Extension Term PPA") with the option of successive extensions on a
year-to-year basis. Copy of the KB power purchase consent letter No. CEOSEc.)99_061221 dated
December 6, 2021 and No. CEOSEC247_13 042022 dated April 13, 2022 are attached hereto at
ANNEXURE D (the "ICE Power Purchase Consent")

3.4 THIS PETITION FOR APPROVAL OF REFERENCE GENERATION TARIFI

3.4.1 Based on the KB Power Purchase Consent and in view of the submissions set out herein, the
Company has prepared and hereby submits before the Authority this Tariff Petition for approval of
the Reference Generation Tariff that will apply during the Two Year Extension Term PPA.

3.4.2 At the outset, the Company takes this opportunity to elaborate eq the imperative nature of the
Authority determining a distinct tariff for the Two Year Extension Term PPA, instead of extending
the Tariff Determination for the Three Year Extension Term PPA.

.3.4.3 In this regard, please find enclosed emails from KB dated February 18, 2022 and April 22, 2022
("ICE Capacity Factor Confirmation"), through which KE has informed the Company of its
anticipated off take for the Two Year Extension Term PPA. which translates to an annual capacity
factor of 30.38% for the first year and a capacity factor of 29.5 8% for the second year as
ANNEXURE F IKE C'APAcITYFACTOR CONFIRMATION).

3.4.4 This is a sharp contrast with the capacity factor assumed in the Tariff Determination of7l % for the
Three Year Extension Term PPA on a take and pay basis. Moreover, whilst the"assumed' annual
capacity factor under the Tariff Determination (for th Three Year Extension Term PPA) is 71%,

20
 the ground realities of off-take by KE are demonstrated through the actual data for the past. 31
months as follows:

FROM
JUNE20,
DEscrnP1'ioN 2019 TO 2019-20 2020-21 2021-22 TOTAL
JUNE 30,
2019
FROM 20T11
JUNE2022
TO 19' JUNE
JANUARY
2022

Capacity-MW 123.50 123.50 123.50 123.50 123.50 123.50

No.ofDays 11 365 365 215 139 1,095

Actual Dispatch -
MWh 29,597 626,766 736,790 368,386 275,705 2,037,244
Actual Dispatch
Factcir% 62.77%
Authority's
Determination % 71.00%

3.4.5 The above data demonstrates that the actual off-take for the Three Year Extension Term PPA is on
average 62.77%, which is in sharp contrast to the capacity factor of 71% determined by the
Authority for the Three Year Extension Term PPA.

3.4.6 It may be noted that if the Authority anticipates the Company to provisionally generate and provide
energy after expiry of the Three Year Extension Term PPA, for any part of the Two Year Extension
Term PPA, on the Tariff Determination (on take and pay basis) without revising the tariff on the
KE anticipated capacity factor, it will result in substantial losses to the Company. Not only is this
commercially non-viable, but it is contraly to Rule 17(3) of the National Electric Power Regulatoiy
Authority (Tariff Standards and Procedure) Rules, 1998, which states and provides that licensees
should receive adequate compensation for their costs as set forth below:

"Tar jffs shall be determined modjfied or revised on the basis of and in accordance
with the following standards, namely.-

(0 tariffs should allow licensees the recoveiy of any and all costs prudently incurred
to meet the demonstrated needs of their customers, provided that, assessments of
licensees, prudence may not be required where rarWs are set on other than cost - of
- service basis, such as formula-based tariffs that are designed to be in place for more
than one years;

('iii,) tariffs should allow licensees a rate of return which promotes continued
reasonable investment in equipment andfacilities for improved and efficient service;

(v) tar fffs should reflect narginal cost principles to the extent feasible, keeping in
view the financial stability of the sector;

(vilO tariffs may be set below the level of cost ofproviding the service to consumers
consuming electric power below the consumption levels determineq' for the purpose
from time to time by the Authority, as long as such tar ¶s are financially sustainable."

21
 Therefore, it may be appreciated that if the existing tariff is not revised at the KE anticipated capacity
factor and in terms of the Reference Generation Tariff; the Company shall not be able to recover its costs
prudently incurred and will not be able operate the Facility on a commercially viable basis.

3.5 SuBMissioN

3.5.1 Pursuant to the applicable laws of Pakistan, including the NEPRA Act and the rules and regulations
made thereunder, the Company hereby submits for the Authority' kind and gracious consideration
this Tariff Petition and prays the Authority approves the Reference Generation Tariff to cater for
and which shall apply, in each case, for the Two Year Extension Term PPA.

3.5.2 This Tariff Petition is submitted in triplicate.

3.5.3 This Tariff Petition is being submitted with the required fee (as communicated by the Authority)
through a non-refundable bank draft/pay order in the amount of PKR 1,869,444/- (Pakistani Rupees
One Million Eight Hundred Sixty Nine Thousand Four Hundred and Forty Four only) dated June
7, 2022 drawn in favor of the Authority.
 SECTION 4
THE FACILITY

23
 4. TilE FACILITY
0

4.1 THE FACILITY TECHNICAL SUMMARY

4.1.1 The Facility owned, operated and maintained by the Company has, over 24 years, been a source of
supply of reliable power generation for KB and is exemplary in the country's power sector. Briefly,
the salient technical features of the Facility, as certified and confirmed in the detailed and
exhaustive RULA Study Report, duly submitted with the Authority during our application for Three
Year Extension Term PPA Tariff and while applying for the extension in the term of the Generation
License of the Company up to June 2029, ale provided below for the Authority's reference:

FACILITY GROSS CAPACIT\ 126 MW

NET DEPENDABLE CAPACITY 123 5 MW

FUEL & TECHNOLOGY HFO/LFO — Diesel Engine, Stork - Wartsila, Model

18V38

FACILITY CONFIGURATION 12 Internal Combustion Diesel Engines

4.1.2 Further, it is highlighted that the Facility (as confirmed by the RULA Study Report):

(i) was designed, engineered and constructed by Power Construction Company BV of Holland
with Wartsila Diesel and ABB Industiy of Finland being the equipment suppliers;

(ii) was designed for continuous operation on heavy fuel oil with start and stops on light fuel oil;

(iii) is equipped with fuel handling, storage and purification system;

(iv) has an operation method that is automatic, with automatic synchronizing and load sharing using
a PLC based control system; and

(v) generates power at 11 kV, which is stepped up to 132 kV through 3 main transformers and
subsequently supplied to KE's grid system.

4.1.3 In addition, for the Authority's benefit and reference, without, in any way limiting the
comprehensive analysis presented in the RULA Study Report, Section 13 (Conclusion &
Recdmmendation) of the-RULA Study Report is reproduced below:

"13. 0 Conclusion & Recommendations

The study carried out to assess the condition of engines and critical electrical components
covering generator and power transformer concluded im'ilh ratings Veiy Good, Good and
Acceptable condition and expected remaining useful ljfe. It is pertinent to mention that the
qualitative condition assessment and expected itfe is based on good O&M management
practices, well maintained inspection, maintenance and other monitoring records, timely
execution of inspection and iiiaintenance work order, replacement of component as per
preventive spares andfollow instructions of troubleshooting as per OEMpractices.

Based on study, following recommendations are made:

(a) The overall condition of Engines is 'Good and the expected remaining life is 10
years. The condition of Generator units is generally found to be in range from
'Good' to 'Acceptable' with expected saft remaining useful lfe of up to 10 years.
The condition of all Power Transformers have been found to be 'Vemy Good' with
expected ljfe more than 15 years.

(b) The condition of storage tanks at the plant facility is 'Vemy Good'. Despite the
quantitative remaining ljfe reported in the recent inspection reports are suggesting

24
4

beyond 15 years. However, due to aging corrosion is expected to increase specially

at attachments (Nozzles, Saddles, Staircase and other Structure, base plates, top
sides of tanks. etc.). At present, the rates of corrosion currently are under
acceptable limits. More robust risk based inspection and fabric maintenance,
coating and external inspection monitoring over the years is needed together with
audits of the safety andfire systems.

(c) Tapal Energy (Pvt.) Ltd. ('the Asset Owner,) to continue existing O&M Practices
for the upkeep of the assets, follow OEM recommended guidelines for the time
driven maintenance and inspection of engines and other critical assets.

(d) Asset Owners may evaluate the requirements for further condition Based
Maintenance practices, such as continued focu. on Vibration Monitoring,
Thermographic Imaging and other use of NDT advanced methods (Acoustics).
7'his can be done by independent plant machinery vibration analysis methods at a
periodic jevel. The objective is to collect data, ident5i vibration zones and
therefore, based on these studies improve Maintenance strategy and control on
aging, failures and leakages.

('e) Some of the critical Engine components such as camshaft, Pistons, and its
associated mechanical components require continued focus in the inspection and
maintenance reporting e.g. photographic recordings, sample micro examination
of cain shaft wear etc. The objective is to capture signs of wear, aging etc. It is also
recommended that OEM guidelines for the camshaft inspection pertaining to wear
may be consultedfor further imnprovenient in inspection reporting.

(,Q It is recommended that condition assessment methodology followed in this study

be practiced at regular levels to validate the findings. Next Conditioii Assessment
can be done in 5 years (2023) and further ascertain the expected life of engines
and critical machinery components and other assets. The condition assessment
may support asset owner in cost benefit and end of economic life assessments to
benefit the business.

(g) Iris recommended to follow the testing and inspection activities as suggested
through LEAP test results for, all Generators in order to ensure the updated
assessment of their comiditions and subsequent corrective actions ('ff any,) to be
taken.

Considering the afore-stated, the matters set out herein and the conclusions drawn in the RULA
Study Report, the Company expects and intends to operate the Facility for at least the Two Year
Extension Term PPA. Thus, the Company submits to the Authority, that the Company is desirous
of continuing to generate power for onward sale to KE, and thus requests approval of the Reference
Generation Tariff to ensure effective and efficient implementation of the Two Year Extension Term
PPA.

25
 SECTION 5
THE GENERATION LICENSE

26
5. THE GENERATION LICENSE

5.1 THE GENERATION LIcENSE

5.1.1 In January 1997, the Company initially obtained a license under the Electiicity Act, 1910 following
satisfaction of the required legal requirements.

5.1.2 Following enactment of NEPRA Act and the rules and regulations made thereunder, the Company
applkd to the Authority for procurement of a generation license for its Facility and on August 26,
2003, the Authority granted the Company the Generation License. A copy of the Generation
License is attached herewith at ANNEXURE F (Copy of Generation License) for the Authority's
reference.

5.2 THE GENERATION LICENSE FIRST MODIFICATION

5.2.1 It is highlighted for the Authority's benefit that the Company previously submitted an application
dated May 22, 2018 (the "Generation License First Modification Application") for modification
of its Generation License. The reason for submission of the Generation License First Modification
Application was to request for an extension of the term of the Generation License in order to bring
the same in line with the Original Power Purchase Agreement (that is, till June 19, 2019).

5.2.2 The Authority's approval in relation to the Generation License First Modification Application was
received by the Company vide the Authority's approval dated November 20, 2018 (the "NEPRA
First Modification Approval") through which the term of the Generatiort License of the Company
was extended up to June 19, 2019. The NEPRA First Modification Approval is attached herewith
as ANNEXURE G NEPRA First Modjficalioiz Approval) for the Authority's ready reference.

5.3 THE GENERATION LICENSE SECOND MODIFICATION

It is submitted that the extension in the term of the Generation License for remaining useful power
generation life of the Facility, a term much beyond the Two Year Extension Term PPA, has already
been granted by the Authority to the Company by way of the Generation License Second
Modification vide the Authority's approval No. NEPRA/RILAG-1117639-44 dated March 9, 2020
(the "NEPRA Second Modification Approval"), therefore, the Generation License of the
Company stands extended up to June 19, 2029. The NEPRA Second Modification Approval is
attached herewith as ANNEXURE G-1 tNEPRA SECOND MODIFICATION APPROVAL) for the
Authority's ready reference.

27
 SECTION 6
KEY CoNsIDEp&TIoNs

28
'6. Kiy CONSIDERATIONS

6.1 DEMAND FOR ELECTRICITY

6.1.1 It is highlighted that KB, being the only distribution / transmission company which has the
exclusive right and legal capacity to distribute I transmit electricity in its territorial area including
Karachi, continuously faces challenges in meeting the ever-growing electricity demands of the
financial hub and economic lifeline of Pakistan. In pursuing its need for power to meet the ever-
increasing demand from its customers, KB has issued its consent vide the KB Power Purchase
Consent to the Company, whereby it shall continue to purchase power from the Company for at
least 2 more years (via the proposed Two Year Extension Term PPA) beyond the Three Year
Extension Term PPA.

6.1.2 The Authority's approval of the Reference Generation Tariff and the subsequent implementation
by KE and the Company of the Two Year Extension Term PPA will ensure continued supply of
reliable electricity to the consumers of KE until June 19, 2024— a critical consideration in light of
the exclusive right, current power generation capacity and demand in KE's distribution area(s).

6.2 THE COMPANY — A RELIABLE SOURCE OF POwER GENERATION

6.2.1 The Company has successfully operated its Facility; has catered for KE's consumer requirements
by exclusively generating an average of 735.962 GWh per annum since its commissioning in 1997,
and has met its obligations under the Original Power Purchase Agreement and the Three Year
Extension Term PPA for over 24 years, the Company holds a very significant role in supply of
power to the west side of KB's transmission network as the power generated by the Company is
transmitted to KE's grid stations of Baldia and Hub — which onwards supply power to major
industrial and commercial customers of KE. The monthly load pattern of dispatch from the Facility
over the last 3 years is set out below for the Authority's reference:

Actual Dispatch from 201h June 2019 to 31st January 2022

100% 91%
90%
80%
70%
60%
50%
40%
30%
20%
o 0 0 o 0
- '
,, 0 a-' 0 z 0- a-' OZO -.

—4—Actual Dispatch

6.2.2 Additionally, the Facility has been used as a 'black start facility' by KB, enabling the grid power
systems to recover from a blackout in various instances of widespread power outage. Time and
again, KB has acknowledged the Facility's contribution in restoring its system.

6.2.3 The Facility's continued operations during the Two Year Extension Term will be available to KE
in case any such outage or blackout occurs.

6.3 THE COMPANY — AN EXPERIENCED POWER PRODUCER

6.3.1 The Company has been in the business of generating and selling electricity since 1997. The
Company, with its extensive experience of over 24 years, has not only satisfied its obligations but
has also established itself as an experienced and reliable power producer in Pakistan's power
generation industry. ..
4 ---
\ .).•\

29
6.4 THE FACILITY

6.4.1 As highlighted in Section 4 (The Facility) of this Tariff Petition, the Facility's remaining useful life
has been quantified and certified for a period exceeding the period relating to the Two Year
Extension Term PPA. With efficient and reliable European equipment and machinery being
fundamental to the Company's success as a power producer for over 24 years, it is submitted that
due consideration is given by the Authority to the benefits that will be driven from the continued
use of the Facility.

6.5 THE Two YEAR EXTENSION TERM PPA

6.5.1 It is submitted that with the current state of the well-maintained and 'debt free' Facility, the
consumers will ultimately benefit during the high demand months of KE, from the electricity
supplied by the Company during the period of the Two Year Extension Term PPA.

6.6 ALL REOUJSITE INFRASTRUCTURE & ARRANGEMENTS ALREADY IN PLACE

6.6.1 Unlike the complexities and long gestation periods involved in thedevelopment of a new power
generation facility, the Project, being operational now for the last 24 years, has all the requisite
contractual arrangements and other infrastructure requirements in place to continue power
generation for servicing the consumers of Pakistan largest city. It is noted that implementation of
the Two Year Extension Term PPA will neither require a financial close from lenders nor
construction of any new transmission lines. With an offtake arrangement already in place and IKE
itself being a strong supporter of and proposing the Two Year Extension Term PPA, the true
benefits of the proposed Two Year Extension Term PPA are submitted for due consideration by
the Authority, for the benefit of the consumers, and for the Authority's approval of the Reference
Generation Tariff.

6.7 DEVELOPMENT & CONTINUED DEPLOYMENT OF EXCEPTIONAL HUMAN RESOURCES

6.7.1 The Company has, over the years, developed highly skilled, experienced and exceptional human
capital, which continues to form the backbone of the Project's success and excellence. While the
Company entered into operations and maintenance contractual arrangements with Wartsila Diesel
Pakistan (Private) Limited and subsequently with Sithe Mauritius Power Services for the operations
and maintenance of the Facility in the initial years, it is highlighted that since the past 14 years, the
Company has been carrying out the operations and maintenance of the Facility solely through its
technically trained in-house resources. The Company's in-house resources include experienced and
highly skilled personnel capable of performing the operations and maintenance of the Facility,
including services in relation to overhauls, major and routine maintenances with minimum input
from the original equipment manufacturers. The performance of the Facility is a testament to the
Company's in-house team's excellence and, as a result, implementation of the Two Year Extension
Term PPA will ensure continuation of such un-parallel efforts.

6.8 INITIAL PROJECT COST & FINANCING

6.8.1 It is noted that the initial cost of development and setting up the Project was funded on the basis of
a debt-to-equity ratio of 75:25. Further, it is submitted that white the entire debt was retired by the
Company by 2004, the initial equity of USD 33,774,000, considering the Project was set up on a
Build Own Operate ("BOO") basis, was never redeemed and still remains invested in the Project.
The Company, subject to approval of the Reference Generation Tariff and the execution of the Two
Year Extension Term PPA, aims to retain the equity in the Project and form, at the vemy minimum,
the basis of continued operations during the Two Year Extension Term PPA.

6.8.2 In addition, the Company requests the Authority's appreciation of the fact that besides the initial
equity, the Project sponsors have endlessly, to date, endeavored to continuously improve and
maintain the Facility through substantial investments in major overhauls and replacement of parts
and components in accordance with the parameters and world class standards prescribed by the
original equipment manufacturers hence assuring the reliability envisaged during the Two Year
Extension Term P.PA.

30
 SEcTIoN 7
REFERENCE GENERATION TARIFF SUMMARY
7. REFERENCE GENERATION TARIFF SUMMARY

7.1. THE REFERENCE GENERATION TARIFF COMPONENTS

7.1.1 In view of the Authority's previous tariff determinations in case ofthe Company and the prevailing
regime for thermal independent power producers (the "1PPs") in Pakistan, the Reference
Generation Tariff is broken down in the following two key components:

(i) the energy charge component of the Reference Generation Tariff (the "Energy Charge"); and

(ii) the capacity charge component of the Reference Generation Tariff (the "Capacity Charge").

7.2 SUMMARY

7.2.1 Based on the Reference Date of January 31, 2022 ("Reference Date") (Subject to indexation at the
start of Two Year Extension Term PPA period and at a plant dependable capacity of 123.5 MW
(net at reference site conditions) and detailed financial analyses, the proposed Reference Generation
Tariff is hereunder:
ENERGY CAPACITY
TOTAL REFERENCE
CHARGE CHARGE
GENERATION TARIFF
PKRJkWli PKRJkW/li PKR!kWh
PROPOSED Two YEAR
EXTENSION TERM PPA
TARIFF FOR FIRST YEAR AT
O.38% CAPACITYFACTOR.:. 22.5020 4 .0328 26 .5348
PROPOSED TwO YEAR 5 5
EXTENSION TERM PPA FOR
SECOND YEAR TARIFF AT
.29.58%CAPACJTY FACTOR,. 22.50 12 4.1300 26.6312
;THREE YEAR EXTENSION
TERM [PA INDEXED TARrFF
As ON 31ST JANUARY 2022 AT
71% CAPACITY FACTOR 22.5460 1. 83 15 24.3775

7.3 THE REFERENCE GENERATION TARIFF TABLE

7.3.1 The Reference Generation Tariff Table is prepared at following reference parameters prevailing on
January 31, 2022.
ANNUAL DISPATCH FACTOR AS
INDICATED BY ICE
. -
• FOR THE: FIRST YEAR OF THE 30.38%
PROPOSED TwO YEAR EXTENSION
TERM PPA
• FOR THE SECOI\D YEAR OF THE 29 58%
PROPOSED TWO YEAR EXTENSION.
TERM PPA'
PPA TERM. . . 2 Year
REFERENCE DATE . January 31, 2022
START OF THE TWo YEAR EXTENSION June 20 2022
TEP.MPPA
FUEL PRICE .. PKR 98,356.48 per ton
KIBOR RATE . . . 10.36% per annum
CONSUMERPRICE INDEX . 158.78
EXCHANGE RATE .. . . PKR 177.25 perUSD
For the INDEXATION ASSUMPTIONS Reference Parameters to be indexed
with actual parameters prevailing on
June20 2022
Authority s benefit and approval, the detailed table setting out the Reference Generation Tariff (the
"Reference Generation Tariff Table") is attached hereto at ANNEXURE H (REFERENCE
GENERATION TARIFF TABLE).

32
 SECTION 8
ENERGY CHARGE

33
8. ENERGY CHARGE

8.1 SUMMARY

8.1.1 The Energy Charge component of the Reference Generation Tariff is based on the actual kWh off-
take, and consists of: -

(I) the fuel component (the "Fuel Cost Component"); and

(ii) the variable O&M component (the "Variable O&M Cost Component").

8.1.2 A summary of the Energy Charge is provided in the following table:

ENERGY CHARGE PK1VkWh

FtJELCO.:. VARIABLE:.
COMPONENT •O&M CosT- -
COMPONENT:

PROPOSED REFERENCE TARIFF FOR THE

Two YEAR EXTENSION TERM PPA — YEAR
ONE 2 1.3745 1. 1275 22.5020

PROPOSED REFERENCE TARIFF FOR THE 21.3745 1. 1267 22.50 12

Two YEAR EXTENSION TERM PPA — YEAR
Two

INDEXED TARIFF OF THE TARIFF 21.7321 0.8 140 22.5461

DETERMINATJON* (FOR INFORMATION)

* Three Year Extension Term Reference Tar!ff as indexed at Reference Date Parameters prevailing on
Januazy 2022 as are applied in calculation of the proposed Two Year Extension Term PPA Reference
Tariff

8.2 FUEL COST COMPONENT

8.2.1 ASSUMPTIONS

The basis for calculation of Fuel Cost Component have been adopted from the Tariff Determination
wherein the Authority had previously used an average of a 5 years' performance data starting from
2014 up to 2018.

Notably the data that was being used in the Tariff Determination was not for the period of a term
immediately preceding 5 years but was based on the 'estimated' calorific value in absence of the
'actual' calorific values for the said period. Thereby the Company has at an average suffered loss
of Rs 0.1822/kWh on account of the Fuel Cost Component for each kWh sold to KE. This is also
evident and is better explained in the following chart detailing the historical performance of the
Company over the Three Year Extension Term PPA.

2021-22
2019 20 2020-21 PROJECTE LAST 3
ACTUAL
ITEM METRIC ACTUAL ACTUAL D FROM TOTAL YEARS
UPTO JAN A%ERAGE
FEB TO 2021 22
- • 02
JUNE2022 •
Lower
Calorific
Value of
Fuel -
Average Btu/Kg 38,447.87 38,270.44 38,395.22 38,367.30 38,383.59 38,367.30
Furnace
Oil
Consumed Tons 135,846.45 160,175.65 80,335.76 59,936.85 140,272.61 145,431.57
Export MWh 626,766 736,790 368,386 275,705 644,091 669,215.72
Heat Rate Btu/kWh 8,333.26 8,319.86 8,373.04 8,340.85 8,359.63 8,337.84

34
Fuel
Consumpti
on Rate g/kWh 216.74 217.40 218.07 217.39 217.78 217.32
Plant
Efficiency % 40.94% 41.01% 40.75% 40.91% 40.82% 40.92%
Authority
Determine
d Plant
Efficiency % 41.34% 41.34% - - 41.34% 41.34%

In order to make the tariff truly reflective of the actual performance of the Facility, the Company
requests the use of the actual data of performance recorded during the Three Year Extension Term
PPA, which is tabulated in the above chart for ease of reference.

The cost of fuel consumption for the Facility, at actual thermal efficiency of 40.92% (LHV)
recorded during the Three Year Extension Term PPA, represents the Fuel Cost Component of the
Energy Charge. The main assumptions used to arrive at the Fuel Cost Component are provided
below:

THERMAL: 40.92%

PKR 98,356.48 per ton (including transportation cost of PKR

506.48, subject to adjustments as per actuals). General Sales Tax
("GST") is not included in the RFO price and shall be a pass-
through to KE at actual

8,337.84 BTU/kWh

,OuT PuT 123.5 MW (net at Site reference conditions)

CAPACITY.

CALoruFIC VALUE 38,367.30 BTU/Kg

the actual OST charged on the Fuel Cost Component of Tariff is to

be claimed at actuals from KE through monthly supplemental
invoice.

8.2.2 INDExATIoN & ESCALATION

The Fuel Cost Component shall be a4djusted on account of:

(i) Fuel price variation of fuel consumed using First In First Out ("FIFO") method during period
of Two Year Extension Term PPA; and

(ii) the actual transportation charges.

8.2.3 INDEXATION FORMULA

The Fuel Cost Component shall be indexed based on the following formula:

FC(R) Relevant Reference Generation Tariff Component * FP(R.)I FP(rc0 * CV 0 / CV(Rv)

Where:

FC(Rey) = .Revised Fuel Cost Component

FC(R = Reference Fuel Cost Componemt

FP(Re0 = Reference Ex-GST delivered RFO price of PKR 98,356.48 per ton
 FP(RCV) = Revised Ex-GST delivered RFO price per ton.

CV(R) = Revised LHV actual calorific value

CV(R0 Reference LHV calorific value of 38,367.30 BTU/Kg

8.3 VARIABLE O&M COST COMPONENT

8.3.1 ASSUMPTIONS

This component includes the cost of lubricants, chemicals, consumables and spares consumed in
generation of power and are directly related to the electricity actually generated. The rate will be
indexed to the prevailing Consumer Price Index ("CPI") of Pakistan. OST charged at prevailing
rates on this component shall be pass-through at actuals and is to be claimed through separate
monthly supplemental invoice(s).

The basis for calculation of Variable O&M Cost Component is the estimated cost of consumables,
spares and major/minor overhauls planned during the Two Year Extension Term PPA, due at the
intervals, as per the original equipment manufacturer (OEM) recommended maintenance cycle and
technical limits of our plant & machinery, becoming due at a dispatch factor of 30.3 8% for year
one and 29.58% for year two of the Two Year Extension Term PPA.

Details of the Variable O&M Cost Component is set forth below:

PROPOSED — PROPOSED —
DESCRIPTION
YEAR 1 YEAR2
Oil and Lubricants including diesel Rs '000 122,266 119,377
Stores, spares and loose tools Rs '000 189,108 182,788
Provision for obsolescence of spares Rs '000 5,000 5,000
Capital Spares Rs '000 54,148 54,412
Total Rs '000 370,522 361,577
Dispatch factor % 30.38% 29.58%
Rs/kWli cost Rupees 1.1275 1.1267

In the Tariff Determination, the Authority used the average of the previous 5 year's performance
data amounting to PKR 464,847,000 (that is, from 2015 up to 2019), being the actual data of the
immediately 5 preceding years.

Though the maintenance cost is based on the maintenance cycle to be followed based on the
anticipated running hours of plant operations, the Company managed to survive on the previously
given Tariff Determination, which was based on average Ii istorical cost, as the average was based
on a longer term and 62.77% dispatch factor and the maintenance cycle of plant equipment based
on running hours fell within the Three Year Extension Term PPA. However, in the instant case the
term of the power purchase agreement is only 2 years. With a low dispatch factor anticipated by
KE and high inflationary trends in the international markets, the Company requests that the
projected cost of maintenance detailed above (based on the maintenance plan developed for the
anticipated capacity factor given by KE and also considering the technical limits and maintenance
cycle recommended by the OEM, for the major components) should be considered to be fair and
just, ensuring the recovery of real cost anticipated at the KE recommended dispatch during the Two
Year Extension Term PPA.

It may also be noted that the Company's calculations show a lower absolute amount at KE
recommended dispatch factor of 30.3 8% and of 29.5 8% for the first and second extension term
respectively, of the Two Year Extension Term PPA as against the average absolute amount of the
preceding 3 year's actual cost incurred on a dispatch factor of 62.77%.

The Company's cost claimed for the Variable O&M Cost Component compared to the recently
indexed Variable O&M cost allowed by the Authority to the power projects under 2002 policy,
which use similar technology (at the parameters) as the Company, as on January 2022 is as follows:

S.No. Power Project under Period of Indexation PKRIkWh

2002 Power Policy
using similar
technology
I AtlasPower TariffforJan—Mar2022 1.6600
2 LibertyPower TariffforJan—Mar2022 . 1.8131
 3 Nishat Power Tariff for Jan — Mar 2022 1.6600
4 Tapal Energy Proposed Tariff at Reference date of Jan 2022 1.1275
for Year 1
Tapal Energy Proposed Tariff at Reference date of Jan 2022 1.1267
for Year 2

The foregoing Variable O&M rates substantiate that the Company's claimed amount is less than
the cost allowed to other similar projects. It is highlighted that the Company has only claimed the
amount for the Variable O&M Cost Component that is required for the actual major and minor
overhauls falling due in accordance with the machine hours clocked during the Two Year Extension
Term PPA at a capacity factor of30.38% for the first year and 29.58% for the second year.

8.3.2 INDEXATION AND ESCALATION

The Variable O&M Cost Component of the Energy Charge shall be quarterly indexed to the CPI
of Pakistan, as notified by the Federal Bureau of Statistics.

8.3.3 INDEXATION FORMULA

The Variable O&M Cost Component shall be indexed based on the following formula:

V O&M(R) Relevant Reference Generation Tariff Component *

(CPI(g) I CPI1ie0)

Where:

V O&M 1 = the revised Variable O&M Cost Component

of Tariff
V O&M the reference Variable O&M Component

CPI(p.ev) = the average revised CPI (General) for the preceding quarter

CPI(R = the reference CPI (General) of 158.78 for January 2022.

n
 • SECTION 9
•CAPACITY CHARGE

38
9. CAPACITY CHARGE

9.1 SUMMARY

9.1.1 The Capacity Charge component of the Reference Generation Tariff is conventionally payable on
the basis of available capacity declared periodically from the Extension Commencement Date.
However, due to the decision of the Authority in the Tariff Determination to only allow a take and
pay tariff to the Company, the fixed cost recovery components of the Company are calculated on
PKRJkWh basis on KE anticipated capacity factor of 30.3 8% for the first year and 29.58% for the
second year. The Capacity Charge component of the Reference Generation Tariff comprises of the
following components:

(i) the fixed operations and maintenance cçst (the "Fixed O&M Cost Component");

(ii) the insurance cost (the "Insurance Cost Component");

(iii) the cost of working capital (the "Cost of Working Capital Component"); and

(iv) the return on equity (the "ROE").

9.1.2 A summary of the Capacity Charge component of the proposed Reference Generation Tariff is
provided in the table below:

•FIxED O&M:: •INSURANcE COST OF

COST COST WORKING
COMPONENT;: COMPONENT CAPITAL
ONEr
PKRJkW/h PKRJkW/h PKRJkW/h PKR/kW/h
First Year of the Two Year
Extension Term PPA
Reference Tariff@ 30.3 8%
Dispatch Factor 1.4024 0.43 14 0 :8 3 63 1.3627
Second Year of the Two Year
Extension Term PPA
Reference Tariff@ 29.5 8%
Dispatch Factor 1.436 1 0.4419 0.8565 1.3955
INDEXED TARIFF OF LAST
NEPRA TARIFF
DETERMINATION @71%
DISPATCH FACTOR* 0.7 132 0.1687 0.3665 0.5 830

*Reference tariff has been indexed at parameters prevailing in January 2022 (assumed as reference date for
this Petition), which is based on the adjustinentlindexation mechanism provided in the TariffDetermination.

9.2 FIXED O&M COST COMPONENT

9.2.1 ASSUMPTIONS

The Fixed O&M Component of the Capacity Charge represents the fixed costs of the management
and staff of the Project; fixed cost of staff for operations and maintenance and firefighting;
administration; security; transportation; staff meals; overheads; office costs; environmental
monitoring fee, audit fee, tax consultancy; legal fees etc.

The basis of our calculation is adopted from the Tariff Determination, wherein the Authority had
taken an average of last 5 years' performance data starting from 2015 up to 2019 (being the actual
data of inunediately preceding 5 years,). Accordingly, the same philosophy has been adopted and
the actual data for the cost incurred during the last 3 years of operations starting from 2019 up to
2022 (being the actual data of immediately preceding 3 years,) has been taken into consideration in
the following table:

9.2.2 FIXED O&M

39
 2021-22

ACTUAL LAST 3
DESCRIPTION 2019 20 2020 21 PROJECTED YEARS
FROM
FROM FEB TOTAL AVERAGE
TO JUNE 202 1-22
2021 To
2022
JAN2022
Salaries, -
Wages and
Other
Benefits 361,078 368,839 227,854 154,850 382,704 370,874
Travelling
and
Entertainment 14,631 14,038 7,633 6,133 13,766 14,145
Rent, rates
and Taxes 11,923 11,729 7,972 6,448 14,420 12,691
Printing and
Stationeiy 599 722 490 271 761 694
Postage,
telephone and
fax 1,140 1,139 847 457 1,304 1,194
Vehicle
running and
maintenance 5,545 4,695 3,759 2,395 6,154 5,465
Repair and
Maintenance 10,876 14,926 9,605 7,128 16,733 14,178
Legal and
Professional 4,594 8,372 910 2,999 3,909 5,625
Utilities
12,408 10,822 12,152 4,337. 16,489 13,240
Training
41 - - - 14
Security
19,397 18,709 11,625 13,069 24,694 20,933
Auditor's
remuneration 733 776 178 780 958 822
Fuel testing
and technical
fees 611 1,025 894 432 1,326 987

Total 443,576 455,792 283,919 199,300 483,219 460,862

The proposed cost for the year 2022-2023 and 2023-24 has been assumed on the basis of average
cost incurred over the last 3 years, which will be adjusted to match the currently prevailing high
inflation rates by way of applying the CPI cost indexation factor to this reference cost at the start
of the term of Two Year Extension Term PPA.

The Company's cost claimed for the- Fixed O&M Cost Component compared to the recently
indexed Fixed O&M Cost allowed by the Authority to power projects under the 2002 policy, which
use similar technology (at the parameters) as the Company, as on Januar72022 is as follows:

S.No. Power Project under Period of Indexation PKR '000

the 2002 Power Policy
using similar
technology
Atlas Power Tariff for Jan - Mar 2022 861,471
2 Liberty Power Tariff for Jan - Mar 2022 828,135
3 Nishat Power Tariff for Jan - Mar 2022 819,333
4 Tapal Energy Proposed Tariff at Reference date of Jan 2022 460,862

The cost claimed by the Company is significantly lower than the cost allowed to the other above
mentioned 2002 Policy Power Projects, therefore, in all fairness, the Company's claim is justified
and it is humbly requested to be allowed by the Authority.
9.2.3 INDEXATION & ESCALATION

The following indexation shall be applicable to the Fixed O&M Cost Component at the start of the
term of Two Year Extension Term PPA:

•"The Fixed O&M Cost Component shall be quarterly indexed (first quarter startinfrom the date
commencing at the start of the Two Year Extension Term PPA, to the C'PI of Pakistan, as noq/ied
by the Federal Bureau of St at istics".

9.2.4 INDEXATION FORMULA

9.2.5 The Fixed O&M Cost Component shall be quarterly indexed based on the following formula:

FO&M(Lnv) Relevant Reference Generation Tariff Component *

(CPI(R) / CPI(Ren)

Where:

FO&Mjtev) = the revised Fixed O&M Component of the Tariff

FO&M(Ra = the reference Fixed O&M Component of the Tariff Purchase Price quarterly
indexed to CPI of Pakistan.

CPJ(R) = the average revised CPI (General) for the preceding quarter.

CPIei = the reference CPI (General) 158.78 of Januamy 2022

9.3 INSURANCE COST COMPONENT

9.3.1 ASSUMPTIONS

The Insurance cost component consists of the customary industry vide covers taken for all-risk
insurance/reinsurance for the Project, as well as for business interruption insurance. The insurance
cost amounting to USD 800,000 per annum considered for the 2 year extended term is based on
actual average United States Dollar based annual premium paid over the last 3 years and assuming
that the Authority will allow adjustment of this component to its actual cost paid to the insurance
company as per prevailing international insurance market pricing for the required coverage.

9.3.2 INDEXATION & ESCALATION

The Insurance Cost Component shall be indexed to the actual insurance cost for the cover required
under contractual obligations with KE allocated over the capacity factor determined by the
Authority.

9.3.3 INDEXATION FORMULA

Insurance component of reference tariff shall be adjusted as per actual cost paid by the Company
according to the following formula:

A1CIns(Ref)/P(ReO*P(Act)

Where

AIC = Adjusted insurance component of tariff

Ins (Ref) = Reference insurance component of tariff

P (Ref) = Reference premium

P (Act) = Actual premium

9.4 COST OF WORKING CAPITAL COMPONENT

9.4.1 The bases of calculation as applied by the Authority during the Tariff Determination of the Three
Year Extension Term PPA has been maintained.

\'-'--
• 41
9.4.2 ASSUMPTIONS

A working capital (the "Working Capital") of PKR 2,223,724,000 is required to finance:

(i) the inventory level of RFO equivalent to 15 days of generation at 100% load factor at the fuel
prices prevailing on the Februaiy 1, 2022;

(ii) energy payments receivables along with GST for credit period of 25 days allowed to KE from
the date of invoicing; and

The cost of Working Capital is calculated at 12.36% comprising of 3 months Karachi Inter Bank
Offered Rate ("KIBOR") 10.36% + 2% spread.

9.4.3 INDEXATION & ESCALATION

The Cost of Working Capital Component of the Capacity Charge shall be quarterly indexed (first
quarter commencing from the start date of the Two Year Extension Term PPA), to:-

(i) the average of fuel price of closing fuel inventory at last day of the preceding quarter; and

(ii) 3 months KIBOR prevailing on the last day of the preceding quarter.

9.5 RETURN ON EQUITY

9.5.1 ASSUMPTIONS

The Authority, in its Tariff Determination haf calculated the ROE component on the basis of
shareholder's equity of PKR 3,732,042,000 calculated based on the investment in the Project of
USD 33,774,000 and converting equity at the rate of PKR 110.50 to USD I. Though the Company
had contended that it is unequitable for the Authority to use an exchange rate prevailing in January
2018 as the basis of conversion, however, the Company's submission was not accepted before the
Authority and accordingly, the Authority calculated the ROE at the rate of 12% on the shareholders'
equity which resulted in the annual ROE of PKR 447,840,000.

The ROE component of the Capacity Charge calculate on the basis adopted by the Authority in the
Tariff Determination, at the following parameters:

INTERNAL RATE OF RETURN-. 12%

REPAYMENT Of' CAPITAL None

BASE EQUITY ASPER NEPRA.-- PKR 3,732,042,000

TARIFF DETERMINATION OF
JUNE 9, 2022

ABSOLUTE ANNUAL RETURN PKR 447,840,000

IN RUPEES AT 12%

The dispatch factor of 71% used by the Authority in the Three Year Extension Term PPA Tariff
Determination was limited to 62.77% (in actual), therefore, the IRR earned by the Company over
the Three Year Extension Term PPA, is 10.6 1%, which is less than the Authority allowed IRR of
12%.

Therefore, in all fairness and to adequately compensate the Company for the ROE duly allowed to
it by the Authority, it is prayed that the Authority may calculate the ROE at KE's anticipated
dispatch factor of: (i) 30.38% and allow the tariff of PKR 1.3627/kwh for the first year of the Two
Year Extension Term PPA; and (ii) 29.5958% and allow the tariff of PKR 1.3955/kWh for the
second year of the Two Year Extension Term PPA.

42
 SEcTIoN 10
CRITICAL ADJUSTMENTS
&

PASS THROUGH ITEMS

43
10. CRITICAL ADJUSTMENTS & PASS THROUGH ITEMS

10.1 ADJUSTMENTS & PASS THROUGH ITEMS

10.1.1 The following adjustments and pass through items shall form an integral part of the basis on which
the Reference Generation Tariff has been prepared:

(i) The Reference Tariff Table shall be reworked at the Extension Commencement Date to adjust
the factors prevailing on the Reference Date to those prevailing on the Extension
Commencement Date.

(ii) Cost of any delay in payments by KB beyond its due date which has not been factored in the
calculation of Reference Tariff and shall be allowed or accounted for as an additional payment
in accordance with the agreed provisions pertaining to the cost of delay in payments covered
in the Two Year Extension Term PPA, as customary in such agreements.

(iii) Any taxes and levies etc. not factored in the Reference Generation Tariff calculation shall be
treated as a pass-through item.

10.2 FORCE MAJEURE E\'ENTS

10.2.1 The Company requests the Authority that where force majeure events triggered by a "Change in
Law" or 'changes in Government policies or Laws of Pakistan' (as defined in the Two Year
Extension Term PPA) (the "Specific FMEs"):

(i) lead to suspension of operations or inability to make partial/complete capacity available, then
the capacity payments for the unavailable capacity is allowed as a pass-through item till the
time normal operations of the Facility resume; and

(ii) lead to restoration to be undertaken, then the Authority is required to determine a supplemental
tariff in relation to cost of restoration or cost of additional consumables, which, in each case,
is then allowed as a pass-through item.

10.2.2 The afore-stated items are to be allowed during the Two Year Extension Term PPA because neither
KB, being the power purôhaser, nor the Company, being the power supplier, have any control over
such Specific FMEs. Further, as a market practice, the Specific FMEs are allowed as pass-through
items in projects involving Central Power Purchasing Agency Guarantee as the off-taker and the
GoP as a party'.

10.2.3 It is further submitted that if the Company is able to recover against the Specific FMEs (including
its related consequences) and is able to resume its power supply, then the consumers are the real
beneficiary since no new asset is required to be constructed and the power can be restored as soon
as the Facility is restored or is able to restart.

10.3 AFFECTS RESULTING FROM THE Two YEAR EXTENSION TERM PPA

10.3.1 As noted in Section 3.2 (The Contemplated Extension of the Term of the Approved Two Year
Extension Term FPA) above, the detailed terms and conditions for the Two Year Extension Term
PPA if found to be different from the terms agreed under the signed Three Year Extension Termn
PPA that may possibly, as a result of the risk allocation contained therein or from additional cost
contemplated from Two Year Extension Term PPA, have an effect on the proposed Reference
Generation Tariff, therefore, it is submitted before the Authority that any cost or risks emanating
from such Two Year Extension Term PPA not already factored in the Reference Generation Tariff
calculation will be, fundamentally, assumed to be a pass-through item and/or shall result in a
supplemental tariff for the Company.

44
 SECTION 11
GENERAL ASSUMPTIONS

45
11. GENERAL ASSUMPTIONS

11.1 FOREWORD

11.1.1 The following have been assumed while calculating the Reference Generation Tariff and changes
in any of these assumptions will result in changes in the Reference Generation Tariff.

11.2 ASSUMPTIONS

11.2.1 No corporate income tax and no minimum turnover tax have been assumed.

11.2.2 The key assumptions are based on actual information available on the Reference Date.

11.2.3 The Base CPI at the reference date for all Tariff Component is 158.78 as published by Federal
Bureau of Statistics, Pakistan in their publication for the month of Januaiy 2022.

11.2.4 2 Two-year extension in the term of the power purchase agreement, commencing on June 20, 2022
and expiring on June 19, 2024, has been assumed.

11.2.5 GST on electricity output is assumed to be pass-through at actual and in accordance with the special
procedure given in the Sales Tax Act, 1990.

11.2.6 Any change in taxes/duties shall be claimed as per actuals and will be a pass through to be paid by
KE.

11.2.7 The prevailing statutoly obligation to pay the Worker's Profit Participation Fund and Worker's
Welfare Fund by the Company shall continue to be treated as a pass through and are to be claimed
at actuals.

11.2.8 The price of RFO is assumed to be PKR 98,356.48 per ton, which includes the transportation cost
of fuel to the site at PKR 506.48, subject to adjustment at actuals.

11.2.9 The exchange rate has been assumed to be PKR 177.25 to USD 1.

11.2.10 All risks emanating from the Two Year Extension Tenn PPA (considering that the Company has
not to date received any draft of the same from KB) if found to be different from the terins agreed
under the signed Three Year Extension Term PPA, will be treated as pass through items and/or
shall result in a supplemental tariff for the Company.

11.2.11 In relation to a disputed pass through item, KB shall not make deductions or withhold any of the
disputed amount from the Company until final determination is made by the Authority, as that
adversely impacts the Company's Working Capital. Once the Authority has made its final
determination, KE may, if applicable, make the relevant deduction, withhold the Company's
subsequent payment or seek repayment.

11.2.12 Anticipated average Site conditions that have been used in the calculation of net output and heat
rate are at an altitude of 65 meter above sea level, average ambient temperature of 30 degrees
centigrade and 80% average relative humidity. If there is any change in the foregoing assumptions,
the plant output and heat rate will be adjusted accordingly.

11.2.13 Facility availability of 92% for 336 complex days per annum is assumed.

11.2.14 'Annual Scheduled and Maintenance 0utages, excluding outages on account of KB, shall be
allowed up to 701complex hours subject to technical limits and without any liquidated damages.

11.2.15 All invoicing and payment terms are assumed to be with a credit period of25 days subject to terms
and conditions given in the Two Year Extension Term PPA.

11.2.16 All of the above assumptions and terms and conditions shall be incorporated in the Two Year
Extension Term PPA between the Company and KB.

46
 SECTION 12
CONCLUSION

47
12. CONCLUSION

In light of the submissions, the financial analysis and information contained in this Tariff Petition,
along with the Annexures attached hereto, this Tariff Petition is submitted for the Authority's
approval of the Reference Generation Tariff

It is also hereby requested that this Petition of the Reference Generation Tariff be allowed in
accordance with the Applicable NEPRA Laws, along with other enabling provisions of law.

Respecifully submitted,
FOR AND ON BEHALF OF THE COMPANY,
TAPAL ENERGY (PVT.) LIMITED

MIJSTAFA LAKDAWALA
CHIEF FINANCIAL OFFICER

48
ANNEXURES

49
 • ANNEXURE A
SHAREHOLDING PArTERN

50
 TAPAL
ENERGY
TAPAL ENERGY (PVT) LIMITED

PATTERN OF HOLDING OF SHARES HELD BY

THE SHAREHOLDERS AS AT JUNE 30, 2021

Number of Shareholding Total Shares

Shoreholders held

1 From 1 to 6,000,000 Shares 2,493,766

6 From 6,000,001 to 8,000,000 Shares 39,539,040
1 From 8,000,001 to 10.000,000 Shares 9,698,886
1 From 10,000,001 to 15,000,000 Shares 12,932,922
1 From 15,000,001 to 65,000,000 Shares 64,664,614

10 129,329,228

Categories of Number Shares Held Percentage

Shareholders

Directors/Chief Executive Officer and

their spouse and minor children
Moiz Ali Tapal 12,932,922 10.00%
Daanish A. Tapal 9,698,886 7.50%
Tabish Tapal 6,466,461 5.00%
Shakil A. Tapal 6,466,461 5.00%
4 35,564,730 27.50%

Associated Companies, undertaking and

related parties 1 64,664,614 50.00%

Individuals 5 29,099,884 22.50%

10 129,329,228 100.00%
 ANNEXURE B
MEMORANDUM & ARTICLES OF ASSOCIATION

51
 /
-. -

-
i•r

TAPAL
ENERGY

THE COMPANIES ORDINANCE, 1984

(Company Limited by Shares)

'1 EMORANDUM
AND
ARTICLES OF ASSOCIATION

OF

TAPAL ENERGY (PRIVATE) LIMITEI

--

TAPAL
ENERGY

(
i

. . c
THE COMPANIES ORDINANCE, 19
(A Company Limited by Shares)

MEMORANDUM OF AssociATIoN
OF
TAPAL ENERGY (PRIVATE) LIMITED1

I) The name of the company is TAPAL ENERGY (PRIVATE) LIMITED.

II) The Registered Office of the companywill be situated in sIarnabad,CapitaI Territory

III) The main and exclUsive objectfOrwhich the company is established is to:st up an industrial
undertaking In power sector to carry on the business of electric power generation, accumulation
transmission and distribution thereof In all its branches and aspects by the use of such forms of
energy and in such manner as may be deemed feasibtefor that purposa.

TO achieve the main and exciusive object the Company shall be authorised:

1 Id impOrt, purchase and acquire by some other means all kinds of raw and other material, and
market, sell, transmit and deliverihe electricity thus generated any wherein Pakistan.

2. To pUrchase, or acquire by some other means, any land or lands and build, erect, construct, furnish,
equip maintain or improve any building structure edifice on for sale and hire and to carry on
constrUction thereof.

3, To acqijfre by purchase, exchange, hire, assignment or otherwise, tenements, buildings, easements,

rights advantages moveable and immoveable property of any kind whatsoever machinery trade
marks patents or inventions licensesto use patents, orotherproperties plants and stock in trade
arid tO employ, resell, sell, exchange, mortgage, get on lease, license to Use orotherwise andlo pay
for the properties, rights orprivilegesacquired by theCompariy.

Convcr1ed From a public ilmilad company to a prinale ilm(ed company. by a Special Recolulion passed ci an Extraordinary General Meeting
held on 19.4.19li9.
 ci

••TA.PAL.
'ENERGY .. ..., .. ':

4.. To arrange for buying all kinds of raw material, lant and machinery, equlpments.and'toôlswhether
locaftr imported, on cash, ioan, deferred Oredit, pay-as-earn ornon-repatriable investment basis.

5 To arrange electricity, waters gas, sewerage and other Utilities required for efficient running of the
prolect.
6 To appoint agerits, sub-agents, àttorñeys, consultants, brbkers and contractors in connection with
the business of the Company but not to act as managing agents.

7. To adopt such means of making known the roduct of the Company s may seem expedient, ad
'in particular by advertising in the press and electronic media, bycirculars, by purchase and exhibi-
tion of works of art or interest, by publication of books and periodicals, and by prizes, rewards
tipen'ds arid donations.

8, To carry on any other Uijies or trade which can in the bpinion of the Company, be adVanta-
çjeously or conveniently carried on by the Company in connection with the main and exclusive
object, If calculated directlyor indirectly, to develbp'any brartOlfes) of the Company's business otto
increase the value any of the Company's property, assets or rights.

9. To enter Into any arrangement with any govemnents or authorities (lè'deràl, Provincial, M9niiiabt.l .s
local or otherwise) or any corporations compatiles firms or persons that may seem coi&i,otjvLa b ,
the Company s exclusive object and to obtain from any such government authority çth(o?ajon"_.
company or person any charters contracts cit crees rights pnvlleges and concessiojivhicVttI.a./
Corn pany may think desirable, and to carry out, exercise and comply with any such crte'pon \ i
tracts, decrees, rights, privileges and concessions . 12, g,/.'.
k; ,:
\_',.—_
10 To sell or otherwise dispose off all goods, matenals articles and things belonging to the 9mpa1y_-' L
either on cash or on credit and either for immediate or future dehvery and to send the same ''
or export to any place that may be deemed necissary or expedientln the event of winding up
Company.

11. To get Insured agains.t losses, damages, risks; acçiderits and liabilitiesOf all kinds which may affect.
the company whether In respect of Its contracts agreements advances orsecurities or rn raspect
of servants or employees of the company, or in respect of property betonging to orleased to or hired
by the company either by setting apart funds ol the company or by effecting such Insurance and in
later case to pay, the premium'thereon

12. To open, close and Operate bank accounts with scheduled banks or financial institutions and to
draw make accept endorse discount execute and issue promissory noted bills of exchange
cheques, bills of Lading, warrants, debenture; and other negotiable or transferable Instruments,
concernIng the busl'ness of this Company.

13. To invest the surplus moneys of the Company'not immediately required in andsubscribe fOr, take,
acqulre and hold shares, debentures, securities of anyother company of corporation whatsoever,
arid to 'invest moneys of the Oompan li any other'mànner,inOjudihg the pui'chase of any book or
any other',deb!s without doingthe business of an investment'company wlthjn'the meaning of the
law;

14. To borrov Or procure on nark-up, profit or return In any forñi, money or finances, in lOcator any
foreign currency from any bank or financial institution and to receive money on mark up and/or
tntetest by issuing debentures, and on security of any such money so borrowed or received to
Page 2
 TAI'AL
- ENERGY

mortgage; pledge', charge or hypothecate whole or any part: of property, assets or revenue of the
Company (both present and future) including its capital by special assignment of otherwise to
'tiansfer oroonvey the same conditionally1 abso.lutely pun trust,and to give, tender power to setl.an'd
other powers as may seem expedient and to purchase or redeem such securities and pay (or such
borrowing and loans,

15. To procure or arrange finances from scheduled banks and financial institutions under any modeof
Islamic financing scheme like, redeemable cipital including modaraba and musharaka and to pro-
cure, raise or to secure the money in such manner as the company may deem fit and particularly by
mortgage of its property in full or in part on both the present and future assets in accordance with
Istamic Laws and/or by the issue of shares bonds debentures participation term certificates Term
Finance Certificates or redeemable capital or any other securities charged or based upon the
udertaking of the company, on any part ci its properly; both present and in future and generally to
borrow money for the purposes of the business of the company 'In such' manner as the company
shall deem (it. To issue debentures or parttcipation lerm certificates, term finance certificates, re-
deemable capiLal, either permanent or rdeemable or repayable or convertible into shares and to
secure any securities ol.the company by a trust or other-assurances.

16, To, pay commission or Otherwise remunerate any company or firm or firms or persob cr persons
(whether an officer of Ibis Company or not) for services rendered in placing or assisting to place any
of the shares of the Company s capital or any debentures or other securities of the Company or for
—. negotiating any of the purchases or sales by thEi Company ur for rendering any service of any kind
M, A'ijN Whatsoever to the Company.

17 1)Tt procure the registration or other recognition of the Company in any country state or place and to
establish and regulate agencies and open bran';hes in any part of the world for the purposes of the
[..! Cnpany's business.

To pay the costs, charges, and expenses preliminary and incidental to the formation, establishment.
-nd registration of the Company1 and to remunerate any person or'com'pany for services rendereuf
or to be rendered in placing or assisting to place cr guaranteeing the placing of any of the shares ri
the Company's capital or any debentures or other securities of the Company or in or about the
cOnduct outs business,

19. To grant pensions, allowances and bonuses to officers, ax-officers, employees or ax-employees of
the company or its predecessors in businec s or the dependents or connections of such persons
and establish and support or aid in the establishment and support of associations institutions
funds trusts nd conveniences calculated to benefit employees and ex employees and officers
and ex-officers (including Directors and ex-dijectors) of the Company,, or the dependents'or con-
riections of such persons, arid to pay gratuities or grant pensions and allowances, and to make
payments towards insurance, and to subscribe or guarantee money for charitable or benevolent
objects, Or for any ehibitibn, or'fOr any public, general or useful Object.

20. . To distribcjte any of the properly of the Cumpany'amongst. the members in specie or kind and n
particular ariyshares, 'debentures or securities of other companies belonging to this Company, or of
which this Company may have the power of disposing in the event winding up of the Company;

21. To create any depreciation fund, provldentfund, reservefund, sinking fund, 'Insurance fund, or any
other special fund conducive to the interest of the company.

Page 3
 TAML

22. To capitalise such portion of the proilts of the Company as are not distribvted amongst harehofd-
ers of the Company in the form of dividend and as the Directors afthe Company may think fit and to
Issue bonus shares as (ullypaid-up in favour of the shareholds of (he Company.

23. To issue any shares of the Company s ruth' paid-up at par or at a premium or at a discOunt as
provided by taw.

24. Toreniunerat Directors, officials1 servants of the Company orany other person or flrm or company
rendering services to this company, out of, or In propOrtiOn to the returns or profits of the company
orotherwise as théCompanyrnay think proper, either by cash payment or by the aUotmenl to him or
them shares or securities of the Company credited as paid-up In full as may be thought expedient.

25. To ppdin( scich persons or rirrns as maybe seem expedient to be general managers, secretaries,
mànagefs, branch managers., or district repesentátives of the Company upon. such terms as the
Company maydetermine.

26. To establish and maintain branches, receiving offices and distributing centers. and to enter frito
contracts or agency agreements (otherthan iianagIng agency) with any other persons or firms or
companies or for the distributing centers for the efficient carrying on of the business 0 the Com-
pany.

27. To undertake and execute any trusts which the company. may thinic fit, and expedient to undertake...
.........................................................................
/ ,-ii1? ";r.,
28. To apply for, purchase or other wl acquire, and protect and renew any patents, patent rigt
brevets d invention (trade marks, designs etc), licenses, concessions and the like conferring aiy L,
exclusive or non exclusive or limited right to their use
. -
29 To establish, improve manage laboratories, research and development centers to perform sutr "a'
research and development as the Company may deem advisable or feasible and to expend money
on experimenting upon testing and Improving orsecuring any process or protecting any invention "<
(s) which the Company may acquire or propose to acquire or deal with

30. To develop and/or transfer technology and tO acquIre or pass on tecihnical know-how.

31. To train personnel and workers, in Pakistan and/or abroad, to obtain technical proficiency'In various
specialities cQnnected with the business of the. Company.

32 it is hereby declared that:-

(a) the word "company" in the above clausesexcept where used in reference to this Company
shalt be deemed to jncttie any body of persons incorporated in Pakistan oralsewhere:.

(b) the main and exclusive object for which the company Is et up are indicated in Claude Ill.
The Company shall have full authority power and competence to do any and all other
things and acts to furtherthe purposes specified in Sub-clauses Ito 31in support of and in
relation, whether directly or indirectly to the said exclusive object of the Company

(c) notwithstanding anything contained in the foregoing object claUse of this Memorandum of
Association, nothing herein shall be construed as empowering the Conipany to undertake
or induie in the business of bnk1ng, finance, teasing, Investment or insurance,directly or

Page 4
 .
TAPAL
ENERGY

ird irectly. as restricted cinerlaw. or in any unlawful operation, arid that nothing in tIle ob-
jects clause.shall be construed to entitle it to engage in such business.

IV. The liability of the members is Iim1ted.•

V The authonsed capital of the Company is Rs 1 500 000 000 (Rupees Fifteen Hundred Million)
divided into 150 000 000 ordinary shares of Rs 10 each with powers to increase and reduce the
capital of the Company In such mannej- as rny be consistent with the provisions of the Companies
Ordinance, 19M.

•:.

Page 5
We, the.severi1 persons whose names and iddvesse,s are subscribed below are desirous of being touned into a Company in purs.nceof the
Memorandum ofAssocicuon and we respecuvcy gree to take the numbei of shaii.s in the Capital of the Company set opposiu.. ow icspecuve nanies -

Nainc enSurnathe I'110n31i1y Number of

(Present and fonuer with ai,v . sharcs lakcu •-'.' ir'.isi
in fu1 in block • thers/11usbands former Rcsidcntiu) by cch / -
hAters) Jamc in full naboiribty OccupIion Address sub criber St1UurC
MRMO1ZS.TAPAL LAT PAKISTANI J3UtNESS 6-A 1SrG1ZRIL4llE 6.250 J
MR SkDIQ Al 1 (IRADINC,) D}IA KARACHI

11R DAANISIIA IAPAL MR ANWAPAU PAKIS1ANI BUSh'U SS F/98 CLIflON 620

S TAPAL (tRADiNG) KARACHI

MR TABISII M 1APAL MR MOIZ S TAPAL PAKISTANI BUSINESS 6 1ST GIZRJ LANE 6250 \
(tRADiNG) D.n.A., KARACHI.

MR..S1-IAKIL A. TAPAL MR. AMIRAU PAKISTANi BUSINESS K.RT. 39iB, M. 6.250

S. TAPAL (tRADiNG) I KNAN ROAD,
LALAZAR. KARACHi.
MR. IAN CHRISTOPHER MR. LAWRENCE G. AMERICAN ENGLNE1RJ 27 .0. .SEAmR1) LAND -. 1
COPELAND COPELAND BUSINESS DiSCOVERY BAY.
LANTAU ISLAND
HONG KONG. 'ç ti.
rcii•t:. u..,L. '.
ALEXANDER ARMAND MR. DAVID WIURED AMERICAN BUSINESS 6•C. GREENBELTCOURT I
KARSNER KARSNER . b1SCOVERY BAY. LAI4TAU
ISLkND. lONG KONG
KM TORE B)ORKMAN MR. .FVALD FiNLAND MARKLTLNG 65920 N. VALLGRUND I
BJORKMAN MANAGER VASA. PINLAND
t, 4%1 -I'P
MIS KINGPIN NONE HONG KONG 1 ORCICN 14 fH FLOOR I UK 24 .i..n
INVESTMENT LIMiTED COMPANY KWOK CENTRE 72 .ttiPY r -.
THROUGH MR.. JAN C GLO1JCESTOR ROAD,
COPELAND WAI'ICHAI, HONG KONG

TOTAL 50.000

Dai.cd the Day of 1995

iUies.s the above sinaiures

Poll Nin, FaUier's/Husband's Name Signature Occupaticin Full Address.

 .
TAPAL
ENE1Y

TIlE COMPANIES ORDINANCE, 1984

(Company Limited by Shares)

ARTICLES OF ASSOCIATION1
OF /I ',
'

TAPAL ENERGY' (PRIVATE) LI TTEDY

4
1
PRELflY1INARY

1. Table A not to apply

The regulations contained in the Tabi 1A in the First Schedule to the Ordinance 1984, shall not
apply to the Company except so far as the same are repeaied contained or expressly madeappli-
cable in these Articlesor by the Ordinance.

2. The marginal notes hereto shall not affct. the t,nslruction hereof and in these presents, unless
there is something jn The subject of context forthe tlme being In force:

I) Afffliate' shall mean, with respect to a Member! any Person direôtfy or indireOtIy'Coitro.f-
.ling, Controlled by or undercommon Cbntrql.with'suçh Member;

). Agreemenr means the Amended and Restated Shareholders Agreement between. the
'Company, Sithe, Marubeni, Kingpin.and the Tapal Shareholders dated 21 October1997 as
amended and/or restated from lime to time:

iii) 'AgreeØ Equlty means the maximum total ordinary equity'share capital of the Company
being USS 33,774,131 (as the same may be increased in accordance with the ferms 0 the
Agreement);

lv) Articles means these Articles o'fAssociation aRered by Special Resolution frorntime to
time;

v) Board means the Board of Directors for the time bein at a meeting duty cOrtstituted,
called and convened;
l Subaliiutadby Special nIuIon paised al an ExI,aordinary GanarI Maelfrig'haid on 19.4.1999
Convactad from a pubfle i}mflod company'Ia a privua Im3Jd company by a Spethal Roacluflon pasied a am Esao7dIñnry Go:Orl MeeflnQ
1eId on '19.4.1999.
 •TAPAL
ENERGY

xxxi) 1Ne capital" means any fundihg in additiofl to t?e Agreed Equity;

xxxii) "Office" means the Registered Offic for the ime beIng of the Company:.

xxxiii "Operating and Maintenance Agreement" means the Operating and Maintenance Agree-
ment made on .1 December 195 between the Company and the Operator as amende. - ,
and/or restated•(rom time to time; • t';
\ \tl J (/ Q
,1

xxxiv) Operatm means Wactsila Pakistan or following the relinquishment by Warisila Pakistar
of its rights and the assumptions by the Silhe Operator of Wartsda Pakistan s otigatio .
arising from and after the date of such assumption under the Operating and Maiqtnarce
•Agreernent,ihesilheOperator:

xxxv) Ordinary Resolution means a resolution passed at a general meeting of the Companyf _t
when the votes cast (whether on a show of hands or in poll) in favour of a resolutio:i"b_yci
Mëmber who being entitled to vote in person or by proxy, do so vote, exceed the number
of votes of any cast agOinsi theresolution by Mambersso enlilled and voting:

Oxii) Ordinance means the Companies Ordinance, 1984 or any statutory modification or re-
enactment thereof for the time being In force;

xxxvii) "Overruns and Shqrtfalls means aft amounts that Increases the Agreed Equity and each
Members proportionate share thereof.on account of the following faätors:

(i) if dueto constraints on availability of debt financing in the form of Working Capital and
refinancing of theExisling Loaji, the Members agree pursuant 10 Article 57 that the amount
of equity financing required is higher thatihe amount of the Agreed. Equity; or

(ii) any call or drawing in any guarantees, letters of credit or other nanciat support provided by
the Members pursuantto the Agreement;

:.xxxviii "Person" means an Individual, partnershiç, cordratlon, comØny, Joint venture, associa-
tIon, trust, ihdorpratedOranisation ora government;.

xxxixt "Project" means the development, design, engineering, maiufacture financing, procure
ment of the Site, construction, permitting, installation,, completion, testing, commissioning.
insurance ownership operation and maintenance of (he Complex and all activities inciden
lal thereto;

xl) "Project Costs nieans the total cost of the Project approximately USS 141,727,131;

xli) Project Documents" means the Implementation Agreement, the GUacantee, the Fuel Sup-
ply Agreement, the Power Purchase Agreemenl,ihe Construction Contract, the quJprnenl
SupplyConiract, the EPC Guaranty, the Operating and Maintenance Agreement, the Long
Term MaintenanceAgreenent, the Memorandum and Articles of Association oithe'Com-
pany and any land purchase or titfe documents pertaining to the Site for the locationof the
Project and each othermaterjal agreement and document relating to the Project, excluding
the Financing Documents entered into by the Company after 21 October1997 (including
land purhase documents fr the lslarn'abad propeilyj;

Page 4
 I
ENERGY

xlii 'Powe Purchase Agreement means the. PowerPurchase Agreement made between the
Karachi Electric Supply Corporation Limited and the Company dated 26 September 1995
as amended by Amendment No.1 made betwee. the Karachi E[ectijc Supply Corporation
Limited and the Company dated 9 May 1996;

xilli) Proxy ináiüdes an. atlOmei duly constituted undera power of attorney:
xliv) 'Registe.r means the Register ci Member to be kept pursuant to Section 147 of the Ordi-
nance;

xlvi) Seal" in relation to a Company means the CcmmonSeaiofthe.Cpmpany;

• ... .

xlvii) Secretary means the Secretary for the time being of the Company /'
• V .

xlviii) Shareholder Loan means a loan from a Member (or an Affiltf ya,MemFeto tJ
,
Company to fund Agreed Equity, NeW Capital, Workin9 Capital or
:

• xlix) Site" means the arid, spaces, waterwa'is, road, wells and any ghtsqqulred.dr.iba)
acquired by the Company forthe purposes of the Complex on, 1hroh, ab.belclvtiV
ground cii which the complex:or any part Ihereof is to be built (inciudnyhout.lunaqpn.
any working areas required byihe Cornpny and the Contractors, viLlaeáX1hir1 and
camps forthe accommodation of the employees of the Company andihe Contractors arid
any subcontractors; arid, all rights of way and ac;s frorn..public highways, railways, and
seaward acçèss, if appiicale);

I) "Sithe means Sithe Maurilius Umited a limited liability company organised under the laws
of Mauritlus and such successors and assigns ofil as may be permitted from time to lime;

Ii Sithê Operator means one or more Affiliates of Sithe that:arereas0nabJy acceptable to -

the Company;

lii) Special Resolution' hasihe meaning a;sigaed thereto by Section 2(1)(36) of the Ordi-
nance;

liii) Tapal Shareholder? meens MotzS. Tapal, DannishA. Thpal, Tahish M. Tapal,.Shakil A..
Tapal, Tajwar M. Tapat, Mustafa A.Tapai, AmFr S. Tapat, .Zafar A. Tapal and the permitted
transferees of such shareholders as provided under the Agreement;

liv) Term Sheer means collectively (I) Summary of +<ey Terms and Condifions dated 23 De-
cember1996 iriitialiedby the Company, lt'43 ank N,V, and Merita Bank Umited, (ii) Sum-
mary of Terms and Conditions for the fMO Term Loan Facility dated 13 January 1997
between the Company and Nederlandse Flnancieriñgs-Maatchappij Voor
Ontwikkelingstanden N,V. and, (iii) Draft Term Sheet, Finnfund Loan Facility for TapaLEn-
ergy Limited dated 13 March 1997 from Finnish Fund fochndustnlal Cooperation Ltd. and
accepted on behalf of the Compaiyön 18 March 1997;

lv) Warts1la Pakistan means Wartsila NSD P3klstan (Pvt) Limited loj:menly:known.as Wartsila
Diesel Pakistan (Pvt) Limited., a private limited compafly organised and existing underth
laws of Pakistan;

Page 5
 TAPAL
ENECGY

lvi) Working Capftar means short term loans in the amount of US $10,500,000 arid a short
term loan in the amount of US$ 453,000 supported or provided byKingpin to finance part
of the Project Costs.

vii) Words importing the singular nurrbershall InpIude the plural number and vice véi'sa.

lviii) Words importing the. mascuflne gender shallinclude the feminine gender.

lix) Expression referring to writing shall unless the contrary Intention appears, be construe s
including references to printing, lithography, photography and other modes of representiig
or reproducing words in a visible form. /t ci
3. Unless the context otherwise requires words or expressions containecliA these Articles
the same meaning as in the Ordinance ( ' '-.- I '\
PRIVATE COMPANY ,..,

4 The Company is a private limited company and accordingly

(a) the right to transfer shares of the company is restricted in the manner hereinafter provided;

(b) the numberf Members forthe time beiri of e Company (not Including persons who are
fo (he time being in the employment of the Company) shall be limited to fifty (50): Provided
that, for the purpose ofihis provision where two or more persons hold pne ormore shares
in the Company jo1nt1y they shall be treated as a single number; and

(c) an invitation to. the public to subscribe for any shares or debenture of the Company is
hereby prOhibited.

CAPITAL

5: The authorised share capital of the ComØany is Rs. 1,500000,000 (Rupees fifteen hundred riiillion)
divided into 150 000 000 ordinary shares of R' 10 (Rupees Ten) each with powers to increase and
reduce the capital ofthe Company In such manner as may be consistent with the provision of the
OrdInance.

SHARES

6. fhe Company shalt not issUe partly paid shares.

7. Except to the extent and in the manner allowed by Section 95 of the Ordinance no part of the funds
of the COmpany shall be employedin the purchase of,or in loans upon the security ofthe Comp,a- .1
ny's shares.
8: The Directors may wilhthe snction clan Ordi ary Resolution of the Company in general meeling;.
increase the authorised share capital by such sum as they think fit to be divided into shares of such
amount as the resolution may prescribe, subject, nevertheless,to the provisions of Section 92 of
the Ordinance.

9. SUbject.to compliance with the requirements of Articles 57and 98 and Section 86 of the Ordinance
where the DirectOrs decIde to lncreae the capital of the Company by the Issue olfurther shares,

Page 6
 TAPAI.
ENERGY

either at a premium or at par, such shares shill be offered on such (ems and conditions and (or
such consideration, and at such times as (he Directors deem fit, to the Mernbers:strictiy in propor-
tion to the existing shares held by each Mernbe Such ot;eç shall be made by notice specifying (he.
number of shares to which the Member Is entitled and limiting a time within which (he offer if not
accepted, will be deemed to be declined; and lifter the expiration of such time Oron receipt ol an
intimation from the Member to whom such notice is given that such Member declines to accept the
shares offered, the Directors may dispose of th€ same in such manner as they think mOst beneficial
to the Company.

10. The Company mayalanytirne pay conimission to any person forsubscrthing or agreeing to sub-
scribe (whether absolutely or conditiona'liy) for any'shares, debentures or.debenture stock of the
Company, or prcidwing or areein toprocure subscriptions (whether absolutely or conditionaily),
for any shares debentures, debenture stock of the Company, but if the commission in respect of
shares shail be paid or payable out of capital the conditions and requirements laid down in Section
- / ' 2 of the Ordinanc& shall be observed Tbc amount or rate of commission shail not exceed any
atutory limit thereon The commission may be paid or satised in cash or In shares debentures or
, debriture stock ofihe Company
V
/ 11 ')4 Exdpt so far as otherwise provided by the conditions of issue or by these presents, any capital
rd by the creation of new shares shall be considered part of the original capital and shall be
tibect to the provisions herein contained with reference to Ihe payment transfer and transmission
vol ing and otherwise.

12. The Company may from time to time by Special Resoiution. reduce its share capital in any way and
in particular (without prejudice to the gOrterality of the power) by. paying off capital or cancelling
capital which has been lost or s unrepresented by available assets or reducing the liability on the
share or otherwise as may seem expedient ind capital may be paid off which Is in excess of the
needs of the Company or otherwise, and paid up capital may be cancelled as aforesaid without
reducing the nominal amount of the shares by the like amount to the extent that the unpaid and
callable capital shall be increased by the like amount.

13. Save as hereinotherwise provided, the Cbmpriy shall be entitled to treat (he registered holder of
any share as the absolute;owner thereof and accordingly shall not except as ordered by a court of
competent jurisdiction he bound to recognise any equitable contingent or partial interest in or any
other right In respect Of such shareon the part of anyother person.

14. Shares may be regitered inthenarne of anylimited company or other-body porporate but not in (he
name of a minor or a firm. Not more than four persons shall be registered as joint holders of.any
shares.

15. lfany share stands in the name oftwo or more persons, (hO person first namnedin the Register shall,
as regards receipt of dividend or service of notice and all or any other matters connected with the
Company except Ypting at the meetirtg rd the transfer of shares, be deemed the sole ho1de1.

16. in the case of the death of any erie or more of the persons named In the Register as the joint-holder
of any share, the survivor or survivors shall be the only person or persons recognised by the Com-
pany as having any title to or Inlerest In such share but nothing herein contained shall be taken to
release the estate of a joint holder from any liability.

Page 7
4

STAPAI.
ENERGY

17. Every Member shall a,m'e to the. Company a place in or out of Pakistan to be regIstered as his
address and such address shall for all purposes be deemed to be his place of residence.

Subject to the provisions of Section 92 of the Ordinance the Company may by Ordinary Reso
lulion:

a) consolidate and divide the whOle or arty part ofits share capital Into shares of larger amount
than its existing shares;

b) sub-divide its shares or any' of them into shares of smaller amount than is fixed by the
Memorandum of Association; I

cancel any shares which at the dale, of passing of the resolutipn have not been taken or
agreed to be taken by any erso.

The resolution by which any share is sub divided or consolidated may determine that as between' , u
holders of shares resulting from sub-division 1r consolidation nghts of profits, votes an'the',.. S"- -

benefit attaching to them will be proportionate to their paid up value and where shares is'uect as
sub divided or consolidated shares are of same class as those previously Issued that rigtiW attach ' -.-.. '1
ing to them subject as aforesaid, shall be th( same as those attaching to the shares prviously '•' '
held.. . \.:•• ''
- \-. --ç:
19 Subject to the provisions of the Ordinance arid these Articles the Directors may allot and issue '
shares in the capital of the Company as payment or part payment of any property sold or trans — ''
ferred, or in discharge of any indebtedness or obligations of the Company, orfor goods or machin-
ery supplied or for services rendered to the Cornpanyin or about the formation or promotion of the
Company or the conduct of its business, and any'shares Whih may be sold or allotted may te
issued as fully paid upshares and if so issued shall be deemed to be fully paid up shares

CERTIFICATE

20, Every person Whose name is entered as a Merñber in the Register shall without payment be entitled'
to receive after allolment or registration of transfer one certificate for all his shares or several
certificates each for one or'more of his shares and upon paynient of such' charges, if any, as the
Directors may determine for eyery:certificate after thefirt,.

21,. The certificates of title pf 'shares and duplicates'tbereof when necessary shall be. issued under the
Seat and shall specify the share orshares held by a Member and the amount paid thereon including
in particular and without limitation such legends as the Company shall be obligated to affix to certain
of the certificates by Jaw or as the Company shall have agreed to affix pursuant to any contractual'
arrangements entered Into by the Company in this respect.

22. The Company shall not be bound to issue rnoe than one share certificate in respect.of a share or
shares held jointly by two or more'perso,ns,.and delivery of'a certificate for a share to any one of joint
holders shall be sufficient delivery to all.

.23. The company shall, ithin ninety days, after the al(dtment of any of its shares, and within 45 days
after the date on which the instrument of transfer has been..lodged. complete and have ready for
delivery the certificates of all shares, allotted or transferred, unless the conditions of issue of the
shares oIherwIs, provide.

Page 8
 TAPA1.
ENERGY

24. If any certificate be worn out, defaced, destroyed or lost or if there is no furthef space on the back
thereof for endorsement of transfer, it may be renewed or replaced on payment of such sum, not
exceeding five rupeesas the Directors may f-om time tc, time prescribe; provided, however, that
such new certificate shall not be granted except upon delivery of the worn out ordefaced or used up
certificate for the purpose of cancellation or upon proof of destruction or loss to the satisfaction of
the Directors and on such indemnity as the Directors may deem adequate in case of certificate
having been lost cc destroyed. Any renewed certificates shall be marked as such.

COMPLIANCE WITH THE AGREEMENT

25. The Members, the Company, the Chief Executive of the Company and lhe DirectOrs of the Corn-
pOhi shall at all times comply and ensure compliancewith the terms and Oonditions of the. Agree-
ment.

TRANSFER AND TRANSMiSSION OF SHARES

26. j_jre or any interest In or to a share (Including the granting of any warrants or options with
,- ctthe,reto) in the Company shall be sold or transferred by a Member or other person entitled
/.torse1lor,t?ts.fer unless and until the rights of lirst refusal conferred by the Agreement on Members
/' ..b9•rtice IV'Mhe Agreement shall have been exhausted.
,/ r
f
-27 _ ( In these/nt o9ale or transfer of shares as provided in Article 26 the transferee of shares shall if
no! aireay a party become a party to the Agreement and shall be bound by the terms of the
Artient iq tjie same manner and to the same extent as the transferor of shares Until the trails
ffrbecQ) a party to the Agreement the transferpr shall be deemed to continue to own sUch
sftres d'shalf be and remain fully liable for any liabilities in respect of such shares and for the
aáIs-oThissions ordefaults of the transferee wIth respect to such shares and the provisions of the
Agreemenl as if the transferorwere still a party thereto. No transfer shall relieve the transferor of
responsibility fpr its own acts, omissions or defaults under or pursuant to the Agreement.

28 Notwithstanding anything contained in these Articles a Merrib8r may assign ortransfer its shares or
any portion thereof to an Affiliatewithout complia0ce wjth the terms of Article 26 provided that such
Member complies with the terms of the Agrement in this regard. pr the purposes of this Article
the term Affiliate shall be deemed to include the spouses and lineal ascendant, descendant and
cognate relatives (and their respective spouses) of the Tapal Shareholders.

29. It in any case the proposing transferor aflej having beOortie. bound as aforesaid makes default in
transferring the shares, the Company may receive the purchase money and shall thereupon cause
the name of the purchaser to be entered in the Register as the holder of the shares, and shallhold
the purchase money in trust for the proposing transferor. The receipt of the purchase consideration
by the Company shall be a goOd discharge to tile purchasing member, and aflerhis name has been
entered in the Register in purporting exercise of the aforesaid power the validity of the proceedings
shall not be questioned by any person

30, The Directors shall not refuse to transfer any fully paid shares unless:-

(a) the transfer deed is for any reasbn defective or invtid provided thatthe Company shall
within thirty (30) days from the date n which lhe is(rument of transfer was lodged with it
notify the defect or invalidity to the transferee who shall after removal of such defect or
invalidity be entiUed to re-lodge the transfer deed with theCompany; or

Page .
 TAPAL
gPiRY

() the transfer is In breach of the Are.ementJor any other cortractuaI arrangements entered
into by the Company; or

(C) the transfer is in violation of these Articles.

.31. If (he Company refuses to register the transfer of any shares, owing to any attachmëntor prohibi
tory order of a competent authority or otherwise, the Cdmpany shall within forty five (45) days after
the dale on which the instrument of transferwas lodged with it, send notice to the transferee notice
of the refusal indicating reasons for such refusal. No transfer of shares i any case shaft be made
to a minor oran insolvent or person of unsound mind.

32. The transfer of shares shall be effected by an instrument in writing In the usual common form
modified so as to suit the circumstances of the parties and shall be executed'both by tfietrarisferOr
'and the transferee and duly stamped according to. law, and execution be attested by at least two
male witnesses, who shalt add their address and occupation, and the transferOr shall be deemed to
remain the holder of such shares until the name Of transferee shall have been entered in the R-
isteofMembérs in.resecthéreof .
/z '"
33 Every instrument of transfer shall be left at the office for registration duly stamped ard shdib —J
accompanied by the certificate of the shares to be transferred and such other evide(cs,Jl-'/,-'
bompany may require to prove the title of the transferor or his right to transfer the
instruments of transfer which will be registered shall be retained by the Company but any in(ru J__/
ment of translerwhich the Directors decline to registershall, on demand, be returned toth
depositjn the same.
1
•
34. Where it is proved to the satisfaction of the Directors 'that an Instrument of transfer signed by the
transferor and the transferee has been lost, the Company may,, if the Directors shall think fit..by an
application in writing made by the transferee nod bearing the stamp required by an instrument of
transfer register the transfer on such terms as to indemnity or otherwise as the Directors may think
fiL

35. Nothing contained in these Articles shall prejuiice any power of the Company to register as Mem
ber any person to'whom the right to any shares of the Qompany has been transmitted by operation.
o,f law.

36. NQ fee will be charged for registering transfer of shares,

37. The transfer books and Register of Members may be closed for any time or times not exceeding in
the whole forty live days in each year, but not exceeding thirty days at a time, in accordance with the
mannerspecifieci in Section 151 of the Ordinance.

3. The nominees ofadeceased Member as spOcjfjed fri Section 80 of the Ordinance, or executors or
administrators of a deceased Member shall be the only persons recognised by the Company as
having title to his share except In case of joint holders In which case the surviving holders orthe
executors or administrators of the last surviving holder shall be the only person entitled lb be so
recognised but nothing herein contained shall release the estate of a deceased joint holder from
anyliability In respect of any'share jointly held by him. The company shall not be bound to recog-
nls.e a nomInee of a deceased Member or executor or adminIstrator unless he shall have obtained
probate or letters of adminlsiration, succession certificates or other legal representation,, as 'the
case may be, from a court of competent jurisdic:ion Pràvided nevertheless that where the DirectOrs
Page 10
 TAPAL
ENERGY

in their absolute discretion think fit it shall b'e lawful for the Directors lb dispense with the production
of probate or letters o administration, succession certificatês,or sUch other legal representation
'upon SUCh terms as to indemnity or otherwise as the Di.'ectors in their absolute discretion may
consider necessary,

39. A person becoming entitled to a share by reason of the death or insolvency of the holder shall be
entitled to the same dividends and other advE.ntages to which he would be entitled if he were the
registered holder of the share, except that he shall not, before being registered as a Member In
respect of the share, be entitled in respect of it to exercise any right conferred by membership in
relation to meetings of the COmpany.

40. Nleither the Company nor its Directors shall incurany liability or responsibility whatsoever in corise-
quence ofthelr registerIng or giving effect to any transferof shares made Or purporting Ia be made
by an apparent legal owner thereof to the prejudice of'persons having or claiming any equitable
right, title or interest to or In the same, notwithstanding tht the Company may hav had notice of
such equitable right, title or interest, or notice prohibiting registrition of such transfer, and may have
,ilsu,ch notice or referred thereto In ciny book of the Company and shall not be bound or
/ reqwrçdotend or give effect to any notice which may be given to them of any equitable right title
or-IflieresI or'te under any liability whatsoever for refusing or neglecting so to do though it may
: ,h-be.p e1red or referred to In some book of the Company; but the Company shall neverthe-
ies 1e atJiben(l to regard and attend to any such notice and give effect thereto if the Directors shall
atfii9kl. fr:/
-•- GENERAL MEETINGS

41 kgeiieia l meeting, tobe called Annual General Meeting, shall be held within eighteen Months from
the date of Incorporation and thereafter once at least in each calendar yearwithln a period of six
Months foUowFng the close of its financial year at such time and place asthe Directors may deter-
mine., provided, however that no greater interval than fifteen Months shall be allowed to ela~e.
between two Annual General Meetings. All general meetings of the Company other than the Statu-
toryMeeting and the AnnualGeneral Meeting, shall be called Extraordinary ner,al Meetings.

42. The Directors may, whenever ibby think fit, Cli an Extraordinary General tvteeting and Extraordi-
) nary Generai Meeting shall also be called on the requisition olthe holders of not less than 10%. of
the issued and paid: up share capital of the Company. On the date of deposit of requisition, 'the
Directors shall forthwith proceed to convene an Extraordinary General Meeting of the Company
and.in case of such requisition, the provisions of Section 159 of the Ordinance shall apply.

43, Ii at anytime there are riot within Pakistan sufficiCnt Directors capable of acting to form a quorum,
the Directors may convene an Extraordinary General Meeting, in the same manner as nearly as
possibfe. as that in which meetings may be convened by the Directors.

NOTICE OF MEETING

44. Subject to the provisions of Sections 155 and 159 of the Ordinance twenty-one days' notice at least
(exciusiveof the day on which the notice Is served or deemed to be served, but inclusive of the day
for which notice is given) specifying the place',. the day and the hour'of meeting and, in case. cf
specIal business the general nature of that business, shall be given, in the manner provided by the.
•Ordinance forthe general meeting, to such persons as are underthe Ordinance orthe regulations
ci the Company entItled to receive such notice from the Company With the consent in writing of all

Page 11
. TAPAL.

the Members entitled to receive notice of scm particular. meeting (other than the Annual General
Meeting) at which a special resolution is to be passed that meeting may be convened by such
shorter notice and n such manner as the Members may deem fit.

45. The accidental omission to give notice of a meeting to orIli non-receipt ofnoice of a meeting by,
any Member or person entitled tq receive notice shall not invalidate the proceedings at any general
meeting.

PROCEEDINGS AT GENERAL MEETINGS

46. The ordinary business of the Companyat arAnnual General Meetingshall be to receive and con-
sider the balance sheet and proflt and loss account, the reports of the Directors and of the auit --.
to elect Directors to declare dividends and to appoint auditors and fixtheir remuneration 'Ai.dir j
business transacted at an Annual General Meeting and all business transacted at E('brdit1ary ,.
General Meetings, shall be deemed special r - '-
l.T
47 No business shall be transacted at any general meeting unless a quorum of Member Ipren(at 'J
I
the lime when the meeting proceeds to business Subject to (lie provisions of the Ordincekhre.&..._', *
Members present personally who represent not less than twenty-five percent of the c1?l vO(th;.i'
I
power either of their own account or as proxies, shall be a quorum ç"
Ii
48. If within half an Jipur frQm the lime appointed fr a general meeting,a quorum Is not present., the
meeting if called upon the requisition of Members shall be dissolved; in any other case it shall.stañd
adjourned to the same day In the next week at the same time and place, and. at such cljourned
meeting if a quorum is not present within half an hour from the time appOinted for such meeting the
Members present being not less than Three shalt contitiite a quorum and may transact the busi-
ness for which the meeting was called.

49. The Chairman, if any, of the Board shall preside as Chairman at every eneral meeting of the
Company, but if there is no such Chairman, or if he shall not be present within .liftOeh minutesafter
the time appointed for the holding of the meeting or is unwilling to act, the Members present halt
electone of the Directors present to be Chairman of the meeting. or if no PirectOrs be present or If
Directors present decline to take the chair the Members present shall choose one of their member
lobe Chairmanef the mee1ing Every Director of theCompany shall havethe right to attend any ¼?
general meeting of the Company and also to take part n the discussion thereat.

5U. The Chairman may with the consent of any meeting at which a quorum is present (and shall, if sb
directed by the meeting), adjourn the meeting from time to time and from place to place, but no
business shall betransactec at any adjourned meeting other than the business left unfinished at the
meeting from which the adjournment loOk plce. When a meeting is adjourned for thidy days or
more notice of acijoumed meeting shall be given as in the case of original meeting Save as afore
said, it shall not be necessarytogive any notice of an adjournment or ofthe business to betrans-
acted at an adjourned meeting.

51. Ala general meeting a reslu1ion put to the Vote of the meeting shall be decided on a show of
hands, unless a poll is (beforeorori the dectaralion of the show of hands) demanded in accordance
withproVislons of Section 167 of the Ordinance:-

a) by the Chairmanof the meeting of his awn motion; or

Page 1?
 TAPAL
NEflGY

b) by one Member having the right tO 'Ote ad the resolution and present in person achy proxy
if not more than seven such Members are personally present, and, by two such Members
present in person or by procy if more than .3even such Members are personally present; or

c) by any Member or Members present in person or by proxy and having not.less than one-
tenth ci the total voting power in respect of the resolution; or

ci) by any Member or Members present in person or by proxy and holding shares in the Com
pany conferring a right to vote on the resolution, being shares on which an aggregate sum
has been paid-up which is not less thad onetenth of the total paid-upon all shares confer-
ring that right.

Unless a poll Is so demanded, a declaration by the Chairman 'of'the meeting that a resolution has on
a show of hands been carried or carried unanimously or by a particular majority, or lost, and an entry
to that effect in the book containing the mInutes of the proceedings of lhe.Company shal,l be conclu-
7 içevidence of the fact without prool of the number or proportion of the votes recorded in favour of
ibr'ã,nst that resolution.

/'AB,deons required tO be'taken by the Members under the Articles or applicable .lav shallb
,;<.:, ten aj meeting and shall require the affirmative vote of Members holding a majority of the
paid-up share capital of the Company, except in the case of a decision requiring a
k&,aercenlage affirmative vote as set out in Article 57

::53 oll duly demanded on the election of a C aIrman of a meeting or on any question of adjourn-
-'--1ñent shalt be taken at the meeting and without.adjoumrnent.

54.. If a polt is duly demanded, it shall be taken in accordance with the manner laid dosin in Section 168
of (he Ordinance and the results of the poll shall be deemed to be'the resolution of the meeting at
which the poll was demanded.

55, The'demand of a poll shall not prevent the continuance of the meeting for the transaction of any
business olher'lhañ the qUestion on which'the poll has been demanded. The, demand for a poll may
be withdrawn at any time by the person or persons who made the demand.

56. The Chairman of any meeting shall be the sole judge of the validity of every vote tendered at such
meetings. The Chaitman present at the time of taking of a poll shall be the sole judge oI.the validity
every vbte tendered at such poll.. -

57. Notwithstanding anything contained in these Articlesthe affirmative vote of the Members holding at
least eighty five percent (85%) of all issued and paid up shares shall be required with respect Ia a
decision regarding anyof the following matters:

) the issuance of, and the Interest rate., terms, subordination provisions and other financial
provisions relating to the issuance of, any New Capita!, or the sale or issuance of New
Capital to any Person not a Member prior to such sale;

(ii) any merger or consolidation of the Company with or into any other Person or:any entry by
the Company into ajOint yenture with any Person;

(iii) the filing bythe Company oI'any voluntary pelilion, for the winding-ii ordissoiulion of the
Company; -
Page 13
 TAPAL
EN(flGY

(iv) any amendment to the Memorandum and Articles of Association;

(v). the incurring of indebtedness on the part of the Company or the provision of guarantees by
the Company in an aggregate outstanding amount at. any time of US$500,000 or more
(excluding the Existing Loan and any refinancing thereof as contemplated by the Term
Sheet and Working Capital;

('i) the approval of alt material'agreements(ircluding any amendments thereto) entered ortd' -
be entered into by the Cômpany'aiter the date of the Agreement, including any Financing
Document, any other agreement with tespiibt'to the financing arrangements for the Project.
and any additional Project Document other than any document entered or to be entered
into by the Company for the refinancing of the Existing Loan as contemplated by the Term
Sheet;

(vii) any change iri.the number of Directors qomprlsihg the Boa?d; -

(viii)' any change. in the status of the Company or other reorganisation of the Com'a2y-"it citt "C,,
assets; ...
/_; ,f/:\ _) '- '-
:i-
(ix) approval of any plan of refinancing the E:isting Loan other than the reflnancirg:contm--. L 'I'
plated by the Term Sheet;. VI -J ;
-..
(x) the requirement for any support from the Shareholders other than for Working Capital and,
the refinancing of the Existing Loan as contemplated by the Term Sheet and \..

(xi) the transaction of any business by the Company with a Member or any Affiliate, of a Mem-
ber, or the causing of the Company to enter into any contract or other agreement with a
Member, an Affiliate of a Member or any employee, officer or directOr of a MCmbér

VOTES OF MEMBERS
55. On a show of hands every Member who, being an Individual, is present in person or by proxy or
being a bod' corporate is present by a representative duly appointed pursuantf'o Article 69 shall
have one vote except in the case of an election of Directors in which case the provisions of Section
178 oftlie Ordinance shailapply.On a poll every MemberhaiI have voting rights as'laid doWrt in
Section 1.0 of the Ordinance. Nothing contained in' these Articles shall prevent a Member from
binding in the case of an individual, himself and in the case of a body corporate itself by contract
with any other Member or Membersto vote his or its shares or other voting securities in any particu-
lar manner, subject to (he terms an condjtons of the Agreement, at an election of Directors or for
the removal of Directors or for the removal of the Chief, Executive or otherwise at any general
meeting of the Company.

5. In the case of joint holders the vote of the seinior Member present whether in person or by proxy
shall be accepted to the exclusion of the vo;:es of the. other joint holders; and for this purpose
seniority shalt be determined by the rderjn which their names stand in the Register.

60. A member of unsound mind, or In respect of whom an order has been made by any court havIn
jurisdiction in lunacy, may vote, whether on a show of hands or on a poll, by his committee or other
iegal'guardian and any such committee orguardian may, on a poll, vote by proxy.

Page 1.4
 ITAPAL
ENERGY

61. No Member shall be entitled to vole at any general meeting unless all sums presently payable by
him in respect of. shares In the Company have been paid.

62. Nb ojbtiQnj shall be raised tb the 'uafi(lca(ion ol any voter except at the meeting ora'djournect
meeting a which the vote Objctd to: Isgiven or tndered, and every vote ilol disallowed at such
meeting shall be valid for all purposes. Any such objection made in due time shall bereferred to the
Chairman of [he meeting, whose decision shall be final and conclusive.

63. On a polt,votes may begiveri either personally or by proxy, or, in the case of a body corpOrate by a
representative duly authorised in accordance with,Artide 69,

64. The instrument appointing a proxy shall be in writing under the hand of the appoinWr or of his
attorney duly authorized in writing, orjt the appointer is a body corporate, under itscommon seal or
the hand of an officer or attorney duly authorized by it and In default theinstrument of'proxy shall not
A proxy need not be a M ember. A proxy who is appointed for a specified meet-
be called a Special Proxy. A'ny other proxy shall be called a General Proxy. A Special
(' ip1xaf1). valid only lorthe meeting to which it relates and it may not be used for'more than, one
-Y ne,ti?t.
4 '\
j- R7-\ ', -I
65 Th ln)frurrt9t appoInting a proxy and the power of attorney or other authonly (if any) under which
itisied ra notanally certified copy of that power or authority shall be deposited atihe Office not
\, êthanrty-eight hours before the time for holding the reeting at which the ersoh iamed in the
1ni 'ht proposes to vote, and in default the instrument of proxy'orthe power ofatiorney or other
u(trUj (If any) underwhich it is signed or a notatially certified copy of that' power or authority shalt
not be treated as valid.

66. An Instrument appointing a proxy' may be in the following form. or in any other fOrm 'which the
Directors shall approve:.

I, the undersigned ' of , , be-

ing a member Of TAPAL ENERGY (PRIVATE) LIMITED hereby appoint
Mr./MrsiMiss .............. of
pr.faillng him/her : , -, - of as my proxy
to, vote for me and on my behalf at the Annual or Extraordinary,(as the case
may be) General Meeting of the Company tQ be hld on the ' day'oI
and at every adjournment thereof (or at every generalmeeting of the
Companyip be held before the ....,. day of ,,, and at every adjoummentof
any such meeting).

Signed this day at

67. The instrument appointing a prOxy shall be deemed to confer authority to demand orjdln In de-
manding a poll,

68. A vote given in accordance with the terms of an insthiment of proxy shall be valid notwithstanding
the previous death or insanity of the principal or revocation of the proxy or of the authority under

Page 15
 TAIA1.
£NRGY

Whichihe proxy was execuLed, or the transfer of the shares in respect of which the proxy Is given,
provided that nolntimàtion in writing 0 such death, insanity, revocation or transler as aforesaid
shall have been received by the Company al the Office before the commencement of the meeting
or adjourned meeting atwhich the proxy is used.

69.. Subject to the provisions of Section 162 ofthe Ordinance, a body corporate whIch is a. Member
may by resolution of its directors or in such manner as may be permitted or required by its consti
tution authorise in writing any person to act as Its representative at any meeting of the Company
and the person so aulhorised shall be entitled to exercise the same powers on behaifof the body
corporate which he represents as that body borporate could exercise if it were an individual Mem-
ber of the Company present in person..A body corporate attending a meeting through sbch rerè-
sentative shall be deemed.for all purposes of these Articles to be a Member present in personat the
meeting.

DIRECTORS .
/.'..\U
70 The number of Directors to be elected shall be fixed pursuant to the provisions of Section 118 of
the Ordinance. . L I
U
71..
\t'•
Article 71 deleted and repIaed with the Article.71 reproduced at the bottom of this pege.
L2'
.• . , _. ... /
.....

72. The first Directors of the Company shall be appointed by the Subscribers, ..

73. Save as provided in Section 187 of the Ordinance no.person shall, be appointed as a Director unless
he is a Member.

74. The first Directors shall stand retired at the first annual general meeting, and directors shall be
elected In their place in accordance with Article 77 hereof.

75 Any person who seeks to contest an electiori'to the offlce of Director shall, whether he is a retirihg
Director or otherwise, file with the Company, riot later than fourteen days before the date of tIle
meeting atwhih electionsare to be held, a notice of hisintention to offer himself for electioh aS a
Directr. Provided that any such person may, a: anytime, before the holding of elections withdraw
such notice.

76. Retiring Directors shall be eligible for re-election.

77. The Dlectors shall be elected ip accordance with the provisions of the Ordinance by the Members
in General Meeting from amongst the candidates eligible for election in the following rnapner;

a) everyMember present in person or by prnxy or by representative shall have such number

of voles as is equal to the product of ttm number of voting shares held by him and the
number of Directors to be elected;

b) the number of votes calculated in accordance with the preceding clause (a) may be given to
a single candidate or may be divided between any two or more candidates in such manner
s the person voting may choose; and

Page .16
71. Unless otherwise determined by the Company in General Meeting in accordance with
provisions of Article 98(b), theoard shall consist:
(i) ten (10) elected directors Including a Chief Executive, if the Chief ExecUtive is nominated
from one Of the elected directors; or
(ii) ten (10) elected directors plus a Chief Executive if the Chief Executive Is not nominated
from one of the elected directors.
 c)
. °TAPAL
ENERGY

the candidate who gets the highest numbEr of votes shall be declared elected as Director
and then the candidate who gets the, next highest number of Votes shall be so declared and
so on untii'lh,e total number of Directors to be e16c1ed has been so elected.

78. The Company may at any time, by a reSolution in general meeting remove a director, appointed
under Section '176 or Section 180 or elected In the manner provided for in Section 178 of the
Ordinance:

Provided that a resolution for removing a directorshalinot be deemed to have been passed Unless
the number of votes cast in favour of such a resolution is not less than-

i) the minimum number of votes that were cast for the. election of a director in the. manner
provided in subsectIon (5) of Section 178 of the Ordinance; or

ii) the total number of voles for the time being computed in the manner laid down in sub-
Section (5) of Section 178 of the Ordinance divided by the number of directors fr the'time
_----..-,eing, if the resolution relates to removal of director appointed under Septions 176 or 180
Ordinance.
/.s \i"rUJ, '''\
t_' '.'---'.'' O\
/T1. .:.Retirin,Dire'trs shall continue to perform their functions Until their successorsare elected.
f-k.
80 A Oire9t eietd by the Members in general meeting sh., hold office for a period of three years
from which his election is effective unless he earlier resigns becomes disquali
edrfim a Director or otherwise ceases to hold office.

81.-S. Jntkevent a vacancy occurs on the Board by reason of the death, resignation orremoval of a
diF1or, StIch vacancy shall be filled by the vOle of the remaining 'Directors if still cOnstituting a
quorum, orf no quorum exists, by the Members at a general meeling called forthal purpose.A
director elected or appointed to fill a vacancy caused by the death, resigna(ion or removal ofa
director 5ha11 be elected or appointed only for the unexpired term of:such director's predecessor in
office.

82. When any 9irec10r intends to be, or Is absent or a period of not less than thUee (3) Months from
Pakistan, he may with the approval of the Directors appointany person to be his alternate director,
and such alternate director during the absence of the appointer from Pakistan, shall be entitled',to
receive notice of and to attend and vote at meeting f Qirectorsand shall be subject to and entitled
to the. benefil of the provisions contained ui these Articles with reference to directors and may
exercise and perform all such powers, directions and duties as his appoinler could have exercised
or performed including the power of appointing another alternate director. An alternate director so
appointed shall not be entitled to receive any remuneration from the Company nor be. required to
hold any qualificatlqn. Such appointment shaIlb recorded in the.Dlreclors minute bOok. A Director
may at any time by notice In writing to the Companyremove an alternate directOr appointed by him
upon the return of the appointer to P'akjsan, cr the death of, or the retirement or resignation as
DFrector of the appoinler. the alternate director shall cease to besuch provided that if any Diret.or
retIres but Is re-elected atthe meeting atwhich such returement'took:effect anyappointment made
by him pursuant to this Article which was fri force immediately prior tothis retirement and re-election
and which has not otherwiseceased to be effective shall continue t operateàfter his re-election as
if he had not so retired. An alternale director shall not be deemed to be, the agent of the Director
appointing him but.s.tialt be reckoned as one with his appoinler. All appoifltments and removals of
alternate directors shall be effected by writing rnder the hand of the Director making or revoking
Page 17
 ITAP*L
ZNERGY

such appointment and left at the office. For he purpose of assessing a quorum In accordance with
the provisions of Article 97 hereof an aiternatu director shall be deemed to be Director, Any
Director may act an

Alternate director for any one or more Directors, as well as being able to act as a Director in his own
right. An alternate director may resign as such upon giving thirty (30) days prior notice to the Board
to this effect. An alternate director need not be a Member.

83. The Directors shalt be paid such travelling and hotel expenses as may be fixed by the Directors
from time to time or if a Director has to come to attend the Board meeting from outstation.

84. The Directors shalt elect.one of their memberas the Chairman of the Board and the Chairman shalt
not have a second or casting vote.

85. The Directors may from time to time delegate any of their powers to a commit[ee,or committees
consisting of two (2) or more members of their boay as they think fit A committee s duties and
powers shall be restricted to the purpose for which It Is formed Any committee so formed shall
conform to any regulations that may by imposed upon it by the Directors and shall be governed in
the exercise of the powers so delegated by the provisions herein contaIned for regulating meetings
and proceedings applicable to the Directors
d ''
POWERS AND DUTIES OF DIRECTORS r ..-

86 The business of the Company shall be managed by the Directors who may pay all (epenes-..., '7
incurred in setting up and registering the Company and may exercise alt such powers oçtte Cq /
pany as are not by the Ordinance or by these Articles required to be exercised by the Cmpan(nL._2d
general meeting provided that no regulation made by the Company in general meeting sh'atl inva1'
date any prior act of the Directors which would have been valid if that regulation had notbeerrriiade. ç

87. Subjecto the provisions of Articles 57 and 98 the Directors may exercise all the powers of the
Company to borrowmoney and tomortyage its tindertaking, property and capital or any part thereof.,
and to issue securities and debentures, participation or term finance certificates or any qther insttu-
ment whether as security for any debt liability or obligation of the Company or of any third party or
otherwise.

88, The Directors may from time to Lime and at any time by power of attorney appoint any company, firm
or person or body of persons, whether nomina:ed directly or indirectly by the Directors, to be the
attorney or attorneys of the company for such purposes and with such powers, authorities and
discretions (not exceeding those vested in or eercisabie by the Directors under these Articles) for
such period subject to such conditions, if any, as they may think fit, and any such powers of attorney
may contain such provisions for the protection and convenience of persons dealing with any such
attorney to delegate all or any of the powers, authorities, ariddiscretion vested in him.
89. A Director of the Company ora firm of which such Director is apartner or private company of which
such Director is a director may with The consent of the Company In general meeting hold any office
of profit in me Company.

90. Subject to the provisions of Section 195 of the Ordinance, the Directors shall not be disqualified
from contracting with the Company either a vendor, purchaser, or Otherwise, nor shall anysuch
contract or agreernententered into by or onbehaif of the company or partnership of or in which any
Director of the Company sha)! be a member or otherwise irtlerested be avoided nor shall any such
Director so contracting or being such member or so interested be liable to account to the Company

Page 18
 ITAFAI.
ENEIrGY

for any prOfit realized by any such contract or atrarigement by reason of such Director holding thrtt
office orof the fiduciar relation therebyestabjisheci, but the nature of his interest must be disclosed
by him at the meeting ofihe Directors at Which the contract or arrangement is determined on, if the
interest then exists, orin any other case at the first meeting of the Directors after the acquisition of
the interest. A.general notice that any Directcrof the Company is a directoro(a memberof any
othercompany or is a member of any named. firm and is to be regarded as interested in any subse-
quent 1ransaç1ion with such'companyor firm shall, as regards any such transaction, be.sulflcient
disclosure under this Article and aflerany such general notice it shall not be necessary lo give any
special notice relating to any particular transactlon with such firm or company. In the case Of' a
Director being directly orindirectly interested or concerned in a contract for the appointment of a
chief executive, managing agent, whole time director, or secretary of the Company, tile provisions
olSection 218 of therdinance. shad be observed and performed,

91. In accordance with the provisions of Section 219 of the Ordinance a Register shall be kept by the
Directors in which shalt be entered particulars of all conlracl or arrOngemeñts and wliichshail be
open to inspection by any Member at the Office during business hours.

92, All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments, and all
RL,7TCIPLS for moneys paid to the Company, shall be signed, drawn, accepted1 endorsed, or otherwise
:ei d, as the case may be, in such manner as the Directors shall from time to time by resolution
og4
/f r7i:y.
/; -.\"
(; rh'çireptbrs shall duly comply with the provsions of the Ordinance and in particular with the
- 'pyysion*In regard to the registration of the çarticuiais of mortgages and charges affecting the
j -rr1y of the Company or created by it and to keep a Register of the Directors and managers
to se/d to the Registraran annual list of Members and a summary of particulars relating thereto
ndjio(re of any consolidation orincrease of share capital and copies of special resolutions and a
:,6pyofthe Registerofthe Directors and notification ofanychangestherein.

94. The Directors shall cause minutes to be made iii books provided forthe purpose :•

a) f all appOlntmentsof officers made by1he Directors;

b) of the names of the Directors present at each meeting of the Directors and of anycommit-
tee oIthe Oirectárs;

c) of alt resolutions and proceedings of all meetings of the Company;, and of the Directors and
of committee of Directors; and ever Director present at any meeting of Directors or com-
mittee f Directors shall sign hl name in a book to be kept for the purpose and any such
iiinri(e of such a meeting if purporting to be signed by the Chairman theiedf, or by' the
Chairman of the next succeeding meetinj:of the same body, shall be sufficient evidence
without any further proof of the facts therein tated.

VACATION OF OFFICE OF DIRECTORS

95. A Dftector shall ipso facto cease to hold office if:

a) he is found to be of unsound mind by a court 'of competent jurisdiction, or

b) he is adjudged an insolvent, or

Page 19
 rAPAL.
E,EDGY

c) he ceases to be a Member of he Company save as provided in Section 187(h) of the

Ordinance, Or

ci) he or any irm of which he is a partner or any private company of which he Is a director
without the sanction of the company in general meeting accepts or holds any office of profit
under the Company other than thatof Chief Executive ora legal or technical advisor or
ban)cer, or

he absents hmséIf from three consecuIivi. meetings of the Directors or from alt. meetings
Of the Directors for a continuous period of three Months whichever Is the longer without
leave of absence from the Board, or

I) he acts in contravention of Section 195 of the Ordinance. or

gj he resigns his øflice by notice ihwriting tQ the Company, or

h) he suffers from any Of the disabilities ordisqualiflcalions mentior:ied in Section 187 of the
Ordinance, or . ' 4i 11 6'
.. .,:oac 'ce ,
i) he has been convicted by a court of competent jurisdiction for an offence involvipg.rno? ,'..
turpitude, or : .....':'.' • ç.
- . ., I. t , 7—.__,__ , '-
he has betrayed lack of fiduciary behaviour and a declaration to this effect has ben mark ,j I
by the Court under Section 217 of the Ordinance '

PROCEEDINGS OF DIRECTORS
96. The'Directors may meet together for'the despath of business, adjourn and otherwise regulate their
meetings, as they think fit The Board of Directors shall meet at least four times in every year to
conduct the business of the Company. A Direct9r may, and the Secretary on the requisition of
Director shall, at anytime, summon a meetinU of Directors. Nomeeting of the Board of Directors
maybe held unless not less than seven (7) days' notice has been given to each Director on the
Board of Directors provided however that such meeting may be held upon shorter notice if such
notice is waived in writing by all of the Directors, If and to the extent permitted byiaw, meetings ol
the Board of Directors may be held by'video conference call, provided a quorum of Directors is
present on.such'call and such directors can hear and see each other and are able to satisfythem-
selves that the dilectors-present at such meetings remain present for the dration thereof.

97 The quorum necessary for the transaction of th business of the Directors shall be four dTrectors r
actually present in person or byan alternate director, and at least one of whom shail have been
nominated by each Group entitled to nominate a director pursuant to the Agreement For the pur- iii
poses ofthis Article, an-aitemate director appointed by a Director shalt be counted In a quorum -at a
meeting at 'Thich the.Djrector appointing him is not present.

98. (a)' Excepta's set forth In Article 95(b) decisions and resolutions of the BOard shall be taken b
not less than two-thirds of the Directors present a meeting at which there 'is a quorum.

(b) No resolution, concerning any matter listed below when p-ut to vote, shall be deemed to be
carried except when voted in 1avou'rof such resolution by at least seven Directors on the
'Board:

Page 20
 (i)
.
prOvisions reJting to the Issuance of, any New Capital, r the sate or issuance of New
Capltat to any Person not a Member pricir to suh sale, including ny decision that New
capita? shall be contributed as equity rather than Sh2rehpIder Loans;
TAPA L
RGY

the issuance of, and the interest rate,.terms, subordination provisions and other financial

any decision regarding the declaration or payment of distributions to the Shareholders (and
(ii)
the amount thereof) whether in the form of dividends (including interim dividends) or return
of capital, including determination of Net Cash Flow;

'(iii) any decision to sell, pledge, lease, assign, mbdgOe orçreate a Lien on or a security
interest, in any material asset of the Company other than for purposes of the refinancing of
the Existing Loan as contemplated by the Term Sheet;

(iv) any decision to lend Company funds to or nvest Company funds in. any other company.
partnership, joint venture or other Person (other than ftinds rnintained and invested by the
Company under and in accordance with the Financing DocUrñerits);

(v) to the extent not OtherNls'e determined by the Agteement or applicable law, any decision
which could reasonably be expected to have the effect of a material change in (A) any of
—.the Company's depreciation or'accounting methods, tax pOlicies or tax elections, or(8):the
r} of the Company or any Member;
\an-) ,,i , c\
• :_'.. C/.\
'- '.(vi\anydj1nge in the' Company s Fiscal Year;
:\
(vii) i-j any lernination of any material amendment or modification to or any waiver or election of
_"any ii'pt under any Project Document an i Financing Document or any other agreement to
— "'4hiç1yme Company s a party if the same could reasonably be expected to have a material
.erse effect on the Company or would require the Company to make payments as a
.:c , esult thereof in an'aggregate amount in excess of US$500,000;

(viii) any decision to cause the Company to enter into or conduct any business other than the
P.rojectand activities reasonably related thereto.;

(ix) any increase in or voluntary prepayment, modifIcation or extensIon of any indebtedness of

the Company (ottierthan for Working Capital and the refinancing of the Existing Loan as
contemplated by the Term Sheet) in an aggregate amount outstanding at any time in ex-
cess of US$500,000;

(x) the initiation, release, settlement orcortiprarnise by the Company of any arbitration, litiga-
tion or other legal a administrative proceeding, or the settlement or comproinis by he
Company of any.threatened claim,, that In either case could have.a material adverse effec,t
on the Company or that could require as part of'such settlement or litigatIon, payments. by
the Company (other than payments covered by insurance) in an amount in excess of
US$500,000:

the transaction of any business by the Company with a Member Or any Affiliate ofa Mem-
ber, or the causing of the Companyto enter Into any contract or other eement with a
Member, an Affiliate of a Member or any employee, officer or director of'a Member;

the approval of each annual budget for the Company and any changes thereto in excess of
115% or the budgeted amount contained in the relevant approved annual budget;.

Page 21
 TAI

(xiii) the approval of all material agreements (ircluding any amendments thereto) entered or to
be entered into by the Company'after the date of the Agreement Including any Financing
Document, any other agreementwith respect to the financing or refinancing arrangements
for the Project, any additional Project Document and any amendment or modification to a
Project Document or a Financing Document other than any document entered or to be
entered into by the Company for the purposes of the refinaricing of the Existing Lo'an as
contemplated by the Term Sheet;

(xiv) th approval of any expenditure not contained In an approved budget in excess of

US$500,000;

• (xv) any change in the number of Directors comprising the Board;

'(xvi) the appointment of'the Chief Executive;

(xvU) the approval of a protocol. With respect to the place, time and procedures'for.rfletirtgs of
the Board of Directors (and any replacement or arhendment of such protocol): and.;

(xviii) the requiremenl'for'any support from the Shareholders, otherthan 1oWorkingiiay,,

the refinancing of the Existing Loan as contemplated by the Term Sheet
. -'-'
99. The continuing Directors may act. n01wi1h51and1n9 any vacancy in their body, but jf,qd s.oiqgg 44
their number is reduced below the number fixed by or pursuant to the regulations othemfatTy)
as the necessary quorum of Directors, the continuing Directors may act for the ptftpos çcg IilIm
vacancies in their body or summoning a General Meeting of the Company, but for n'oheruth...
•.p••• 4

100 All acts done at any meeting of lie Directors cr by any person acting as a Director shiçiitli,
standing that it shalt afterwards be dlscoverert that, there was some defect in the appointmel 'O
continuance in office of any such Director or person acting as aforesaid or that they or any of them
were disqualified or had vacated office, or were not entitled to vote, be as valid ash every such
person had been duly appointed or had' duly continued in office and qualified and had continued to
be a Director and had teen entitfed.to b'e'a Director.

'101. Except as otherwise provided iii the Ordinancu, any action which may be taken at a meeting. of the
Board shall be validly taken withOut such meeting if a.resolulion in writing approvihg such actign is
executed by the Directors that would otherwise comprise a quorum under ArtIcle 97 or, if Article
98(b) is applicable, the number of Directors required to take such action pursuant to. Article 98(b).
For this purpose,, it shall be permissible to circulate the text of the proposed resolution duly signed
by the Chairman, ifany, of the Board orthe 'Chief Executive and obthin the signatures of ail,the other
Directors thereon separately by lax (the signed original whereof shall be sent in due course by mail
or courier by the Company for its record) and such resolution shall be effective as soon as tile' text
of the resolution signed by each of the other Directors'shall have been faxed 10 and received bythe
Company,

102. If at any meeting the Chairman is absent, the Directors present. may elect any one of their number
to act as the Chairman for the meeting.

CHIEF EXECUTIVE

103. The Board shall within fourteen days afterthe constitutioii of the'Board or from the date of election
of Directors or the office of the Chief Executive ftliing vacarit as the case may be, appoint, subject
Page 22
 .TAiAL
EJGY

to the provisibns of Section 198 of the Ordinance, a person tobe the Chief EXeutJv•of the Corn-
pariy. The period forwhich a thief Executive shall bap.pointed shall not exceed three years from
the date of appOintment unless he earlier resigns or his services as Chief Executive have been
terminated by the Board In accordance with ard In the manner as the case may be the provisions
of the Ordinance and the Agreement On the expiry of his term of office a Chief Executive shall be
eligible for reappointment if nominated in the manner provided in this Article The terms and condi
tions of appointment of a Chief Executive including his powers and remuneration shall be deter
mined by the Directors subject to the provisions of tierdinance.

104. The Chief Executive shall, if iot already a Director, be deemed to be a member of th ord àrid
shall be entitled to all the rights arid privileges (including the right to vote at meetings of the Board
and other proceedings and fo resolutiOn by circular) and. .subjectto all ofthe liabilities of a Directdr
of the Company Provided however that if an elected director is appointed as the Chief Executive
he shall not have an additional vote while he holds office as Chief Executive. The Chief Ececutive
shall be entitled to such remuheration, behefits and allowances as the Board may specify. Subject to
sUpervision of the Board, the Chief Executive Shall be responsible, and hold the powers and
authorities for the implementation of policies decisions guidelines and directives of the Board icr
achievement of the objecves of the Company and shall have, sUbject to Article 98, full poWers to
execute the same, including powers for conducting day to .day management and business of the
Company, appointment and termination of personnel (except in the case olGeneral Manager and/or
Executive Directors who would be appointed arid their terms and cohditions determined subject to
_pri. ,c ova! of the Board). The. Chief Executive shall inform.the Board subseuently and at the
.le opportunity and the Board may revieW it if it considers necessa4', powers to carry
,\&iUeppr Lion and distribution Import export and operation of bank accounts and to make
ymeh'tsand'•'wers to appoint distributors, authorized sub-contractors, dealers or agents. The
-'.1
jCtExutiv' ay further delegate an;y of his poWers to.ahy oth?r persqn(s) or committee(s) as he
•: • tayt1iinl subject to the approval of the Board.
I .i
1.5. heiCJ 'xitive shall devote his time exclusively to the management 6f the C.ompany except
: 'tl riay 'itti the prior consent of the Board, devote lesser time to the Company or become a
.h company or companies as are.notehgagbd in any business in direct c0n3p0t11i0n
Company.

SECRETARY

106. The Secretary shall be appointed by the Directors for such term, atsuch remuneration and upon
such conditionss they may think,fit, and any Secretary so appointed may be removed by them.

THE SEAL

107. The Diçe.ctos .sha)l. provide forthe safe custody of the SeatWhichsall only be Used by the authority
of a:resolution of the Board Orby a committee of Directors authorised in.thal behalf by the Directors
and every Inst rument to which theSeal shall b aifixed shall be signed by either two Directors or
one Dirctotarid the Secretary.

DMDENDS AND RESERVES.

108. The Company. in general meeting may declare dividends, but no dividend shall exceed the amount
recOmmended bythe Directors in accordance with Article 98(b). t'J0 dividend shall be paid by the
company otherwise than out of the profits of the company or in contravention of Section 248(2) of
the Ordinande.

Page .23
 EAPAL -
£NEI?GY

109. The Directors may from time to tirnej pay to the Members such lnteri dividend as appear to the
irectors to be justified by the profits of th Company.
i-.
110. The Dftecidrs may, before recommending any dividends, set aside out of the profits of.the
Company, such sums astheythink proper as rserve or reserves, which shah, at the discre-
tion of the pirctors, be applicable for meeting contingencies, or for equalizing dividends, or for
any other purpose to which the profits buihe Company may be properly applied, and pending
such apphicaion may, at the 1ike discrétidn, either be employed in the business ofthe Company
or be invested in such investments (other than shares of the Company) as the Directors may
from time t.0 time think.fit.

111. Whn any shareholder isindebted to the Company; all dividends payable to .hjfl, ora.siifticient part
thereof may be retained and applied by the Directors in or towards satisfaction of the debt

112. Any divideid, interest or other moneys payablein cásh.in respectof shares may be paid by cheqü
or warrant sent through The post direct to the registered address of the holder or in the case ofjoin_
holders to the registered address of that one of the Joint holders who is first named on the- Regi Of
or to such persons and to such address as the holder or joint holders may in wnting diced ' -
such chequeorwarrant shall be made payable to the order of the person to whom it. Is sent Jfiy1 - 1
two or more joint holders may give effectual receipts for any dividends bonuses or otherieys -
payable in respect of the shares held by them as joint holders The dividend shall be paid wfflIn the —
period laid down In the Ordinance... • •-

113. Unpaid dividends thall not bear iiiterest as against the Company.

CAPITALIZATION OF PROFITS

114. TI1 Company in general meeting may uØon :ihe recornrflendattQn of the Directors resolve that it is
desirable to capitalize any part of the amount for the time being standing at the credit of any of the
Company s reserve accounts or to the credit of the profit and loss accounts or otherwise available
for dIstribution arid accordinglythat such sum be set free fodistribution ainongst the Members who
would be entitled thereto if distributed byway of dividend and in the same proportion on condition
that the same be not paid in cash but be applied either in or towards paying up any amounts for the
time being unpaid on any shares held bysuch'M?mbe:rs respectively or paying up in full Urt-isued
shares of the Company to be allotted and dlstnhuted/credited as fully paid up t and amongst such
Members in the proportion aforesaid or partly in the other, and the Directors shall give effect to
such resolution,
ACCOUNT$

115. The Directors shall cause the Cphipànrto keep properbooks ofaccouni as re4u1fed under Stion
230 of the Ordinance and in accordance with sound and geneca11yaccep1ed accaunlung principles
and cbrporàle practices.

116. The books of account shall be kept at the Office of the Company or. at sijch other place as the
Directors shall thin.k fit nd shall be open to ifl.spç.tiçn by (he Directors during business hoUrs.

117, The Directors shall from time to time determine whether and to what xient and a whit rne and
places and under what condition or- on regtilatiofls that accouflts and books or papers of the
Company or any of(hemshal,lbe.opeñ to the inspection of Members not being Director.s,.and no.
Membec (not being a Director) shari have any rijhtof inspecting any account and bok or papers.o

Page 24.
 TA?'AL
E?4ERGY

We Cp,mpany except as,.conferred by law or authoriseo by the Directors or 'by the Company' in
general meeting or under this Article 117 Notwithstanding the aforesaid any Member (or in the
case of tte Tapal Shareholders, 'any group of t em acting collectively) who hold shares 'ufficient
to elect a least one director shall have the right to inspect in person or through its authorised
representatives, the books and records of the Company at alt reasonable times The Company
shall upon request provide each such Memberwith copies of all tax returns promptly after the filing
fuch tax returns'with [he appropriate govrnment'aJ authorities and copies.of proof of'payment
submitted in connectioq with such tax returns The Members shall cause the Board to adopt appro
priate resolutIons permitting the Members access to the books, records and other documents as
the' may' reasonably request.

118. The Directors shall as requfred by Sections 233and 236,bf the Ordinance caUse to be'pre'ared and
'to be laid before 'the Compañy'in general meeting such pro'flland loss accounland balance sheets
duly audited and reports as 'are referred to in Woe sectiors.

119. 'The bala,nO 'sheet, potit'a,iid loss account, 'arid dther reports referred to in Mlcle 118 shall be
made out in everyyear and laid before the Company in annual general meeting made up to a date
not more than six Months before such meeting. The balance sheet and profit, and loss account shalt
be accompanied by a report ofihe auditors of the Company and the report of DjreTtor.

• 120. A copy of balance sheet and profit and loss 'account and reports of DirectOr a,d aUditorS shall, at
-'isIr,.Jeast twenty one days preceding t'he meeting, be 'sent to persons entitled to receive notices 'of
mageral meetings inthe niannprinwhich ndtices'are to be given hereunder.

,7<•/ __ -.
'5 UJ? Directors shall in all respect comply with the provisions of Section 230 to 236 of the Ordinance

••.• • f
4 AUDIT
..
3)ditors shall be appointed and theirduties regulated in accordance with Sections 252 to 255 of the
-Ordinance The Company s annual financial ctatements shall be prepared in accordance with gen
erally accepted accounting prindipies of Pakistan.

NQTICS
kThI 123. (a). A nOtic ma9'be given by the Company to ny Member either personally or by sendi' ii, y
post to him to his registered address or (if he .has no registered' address in Pakistan) to th
address if any within oroutside Pakistan supplied by him to the Company for the giving of
notices to him.

(b) Where a nbtide is seAt by post, service of the notice shall be deemed'tq be. effected by
roper1i ad'dressin, prepaying, arid posting a letter containing the notice and, unless [tie
contrary is proved, to have been effected at the timeat which the,lellerwould be deIi'ered
in the ordinai course df'post.

124. A notice may be given by the Companycthe jOint holders of'a share bi diving the notice to the joint
holder named first, In the Register in respect of thè'sh.are and a notice so given shall be sufficient
notice to 'alt. th'a 'hldei of sUch shares.

1'2. A notice may be given by the Company to the persons entitled to a share In consequence of tjie'
deathrinsolvenc,y ofa Member through'the post in a prepaid letteraddressd to them by name or

Page 25
 ENERGY

by the title or represeniatrives of the deceased, or assignee of the insolvent or byany like dcrip-
tion, aUhe adres (ifany) in orouVofPakistan supplied forihe puipose bythe persons claiming to
be entitled, or (urttil such an address has beenso supplied) by giving the notice In any manner in
which the same might have been given if the death or insolvency had not occurred.

126. Notice of every general meeting shall be given in the manner herèinbefore authorised 10(a) every
Memberof the Company except those Members who having no registered address Within Pakistan
have not supplied to the Companyanaddressivithin or outside Pakistan forthe giving ofnoticeo
tjiern; (b) every person entitled to a share in conequénceof the death o(insolvencyof a Member,
who but for his death or insolvency would be entitled to receive notice of the rneeting; c) the
auditors of the Cornpanyfor the timbeing: and (d) the Directors.

WINDING UP

127 (a) If the Company is wound up the liquidator may withthe sanction of Special Resolu c,
the Company and other sanctions required by the Ordinance divide amongst thr'.-
bers in specie or kind the whole or any p art of the assets of the Company whettheX'
consist of property of the same kind or not
f '
r-2_.

(b) For the purpose aforesaid the liquidator must set a value as he deems in good fai fair
Y ? I i

upon any property having due regard for the propertys fair matted value to be diviió4,as
-: ..
aforesaid.

() Theliquidatorshall distiibiite the.cash and noncash proceeds torrrithe sat&6fthe.Cthripa-

fly's assets, and any asset not sold, excpt as may be otheiwise provided by applicable
law in the following Order of pnonty

cl) All of the Company's debts and liabilities hall be paid and dJschàred in the, order of priority
provided by applicable law: and

01) The baIaice'shaIl b distribi4cd to the Members pro rae in accordance with the ratib which
the riumbero.f shares, held by each Member bears to the total number ofissued and paid up
shares of the Company.

(d) The liquidator may, with the like sanction, vest the Whole orany part of such assets for the
benefit of the conlributories as the liq'uidathr ViththeIike sanction, thinks fit, but'so that no
member shall be compelledto accept any shares or other securities whereon there is any
liability..

(e) Upon completion of distribution pursuant to this Article the liquidator shall take such ac-
tions, including executing any documents or agreements as may be necessary to dissolve
the Company under applicable law..

SECRECY

128 •()• Subject to.Article 128(b) and (C) no Member nor its Affiliates or nominees shall reveal to
any third party without the prior consent of the other Members any information concerning
the organisation business manufacturing processes finances transactions or affairs of
the Company the other Members or any of the other Members Affiliates or nominees or
any iafbrmation related to theAgreement (the Conndentia? InformatiOn") and shall not us

page 28
 I ,

TAPAL
ENEnGY

any such Confidential Information in any mannerwhich may directly o.rindirectl' injure the
Company any other Member or any of the other Members Affiliates or riomi nees except
that such Confldentiat Information may be disck1sed if and only to the extent required by
law, or to any lender or prospedtive ender Pr other parties providing financing to the Corn-
pany, provided that such lender1 prospective lender or party providing financing has sup-
plied an undertaking.which shall be acceptable. (i) in thécase.o.f information pertainih to a
Member, to that Member and (ii) in the ca:;e of information pertaining to the Company:, to
the Board in its sOle .4iscretion, tO keep such ConfidëntiallnfornationcnfidentiI o sub-
stantially the same terms as are contained in this Article The provisions of this Article shall
not apply (:) in respect of information which is or has become publicly available through no
act or omission of a Member its Affihiats agents or nominees (ii) to the extent such
information was in the possession ofthe Member, its.Affiliates, agents or.nomieesprioto
its earliest receipt from any other Member or the Company or (iii) as may be required in any
report, statement or testimony required to be submitted to any municipal state or national
regulatory body any court or any arbitration tnbunal having or claiming Ia have jurisdiction
over it, or as may be otherwise required y law, regulation court order or othergovernmen
tel authority, or as may be required Ui response to any suthmonsorsuboena or in connec-
tion with any litigation or arbitration under the Agreement.

-—.4n the course of err offer to a iird party tO sell, transfer, assign, dispose of pledge, charge
Jöypolhecate any shares a Member-shall be entitled to disclose Confidential Information
,/ \'4o )'Ep third party, provided that: •-
/ ' '7—T-c-
JET. '/- i_ - ., ., - - -
-- ''
- I
' '
promptly informs the other Members Ole substnce of-a1f0oAfidentia1 Innor-
IVll I1)I

, ---'/- .I
mo irrnation shall be disclosed o the third party uñles the third party: has first supplied to
tAther Members an undertaking in writing on substantially the same terms as Article

c) The BOard hatl exclusively: control all çublicdisclosures and comn'iUnlcations vith the
press regarding the Company..

INDEMNIY

129. Every DirectQr orofflOerof-the Company arid every person employed- by the Company as auditor
shall be indemnified out of he funds of the Cqmpany against all liability incurred by him as such
Director officer or auditor in defending any proceeding whether civil or criminal in which judgment
isgven in his faour; or inwhich.he is acquitted, or in:cbnnectionwith any aplicaton under Section
488 of the Ordinance in which relief -Is granted to him by the court

RECONSTRUCTION

130. On any sale otheundCrtaking of the Company, the Directors or the liquidator on a winding-up may,
jf authorised by Special Resoiution, accept fütlypaid or partly paid-up shares, debentures orsecu-
rifles of any other company, whether ihcorpOiite in Palithan or not either then existing or lb be
formed for-the purchase in Whole arm partOf the propertyofthe Company,.and theDirectors-çf the
profits of tire Company permit) or the liquidator (in a winding up) may distribute such shares on any
other property of theCompany amongst the Members withoutrealization, or vesl the same in trus-
tees for them, and any Special ResOlution ma proldé for the ditributiop or appropriation of the

Page 21.
 IAPAL
ENERGY

cash, shares, or other securities, benefits or toperty, otherwise than in accordance with th strict
legai rights of the Merñbers or contriutories of the. Company, and for the valuation of çiy such
securities or property at such pcice..and.in such manner as the. meeting may approve, arid all hold-
ers of shares shall be bound by any valuation ordistributiori so authorized, and waive a!l rights in
iela[ibn thereto, save only incas the company is proposed tObe oils in the course of being wound
up, such statutory rights if any, underSection367 of the Ordinance as are incapable ofbeing varied
or excluded by these Articles.

CHANGE OIF NAME

131. 11 at any time tihe aggregate.shareholdkg of the Tapal Sharehordensfalls below tent'-ix per cent
26%)oftheissued and paid-upshares of the Company, the Tapal SharehOldersshall be enUaD—
require that the name of the Company be changed so as to remove the word Tapal
name and each Member shall take all•such steps as lies within its powor control ':\
Company effects such change. \
%
f;

•:•

Page 28
We. (lie sevelDi persons whose names and addresses c'suhcibd below are. desirous of being formed into a Company in pul:uiice or.the
AricIes ot'Association, and we rspcth'e1y agree to take th number of.shars in ihe Capiix1 of the. Company set, oppcshe Oui itspeclivc. names:-
rt
Naincs .md Surname N-wonthty //
Number of
(Prc.uit nid fonnci wtIi any chi c_ ikcn ,
in full j;i block F-uhci /Huchjrid mounLr Rc,dcniil by each f .- i
k(IcrS) N utc iii full Ii.niou tilty Occupation AddiLs iibcribcr
( . Situe '
MR MOJZS IAP'L MT PAKISTANI BUSINi S 6A JSI'GIZRI I ANL 6250 r
MR S ;DIQ ALl (1 RADING't 0 H A KARACHI .. J
/
MR D'NISllA 1AP'1 MR ANViARAT I PAKIS1ANI BUSINESS 119)1 CLIFTON 6250 ''-
S. TAPAL (RA l)ftIG) KARACHI

'MR.1A13lSHMTAI'L MR.. MOIZS. TAPAL PAKISTANI BUSINESS 6-A, 1ST GIZRI LANE. 6.250
(l'RADING) D.H.A., KAlACFll.
MR. S1+AKII. A....APAL MR. AM1R ALl PAKISTANI IIUSINESS K,P.T 39/I)'. M. 6.250
S.TA['AL (TRADING) -I• KIIAN ROAD.
LALAZAR, KARACHI.
MR. IAN CHRJSTOPIIIIR MR LAWRlNCE G AMERICAN. ENGINEER! 27-1), SEAI3]RI) LAND I
COPELAND COPELAND 13USJN1SS DISCOVER?BAY,.
LANTAUISI.AND
IIONG KONG.
(a" TF" r')
Al LXANDI R ARMAID MR DAVID 'A ILFRED AMI }UCAN 13UJNCSS 6 C CR1 I NI)EI 1 CC)IJR1 I .
:KARSNER KARSNER DISCOVERY BAY. LANTATJ '' S

ISL.NI). HONG KONC

,, /
KM TORE BJORKlvN MR. EVALD
I3JORKMAN
FINLAND MARKETJNQ 65920 N. YALI..GRUND
VASA, FINLANI)
Aftt 211/j f
MANAGER j. D,i/ .
- /
M/S. KiNGPIN NONE HONG KONG FOREIGN 14Th FLOOR. L(JK 24,997
INVEtMENTLIMiTIII) 'COMPANY KWOKCENTRIL 72 . . r?• 0
ThROUGH MR IAN C 01 O1JCES10k RD \D t Ut-
COPELANI) \VANCIIAI. HONG KONG
So,000
--
Dalcd the l)ay of 995

\''iriiess to the above si,iiausr

Full Name. Ftithe'r'sIl-h;sband's Name Signature Occupation. luiI Address

 ANNEXURE C
CERTIFICATE OF INCORPORATION

52
C

: GOVERNMENT OF PAKISTAN

1'
CE1T!FICATE OF INCORPORATION

(Under section 32 of the CompaniesOrdinance, 1984 (XLVII of 1984)

IO1i6
Company R.egiexsUon No.

4ERGY Lull TUI'

I hereby cerufy tisi "TAI7AL

ii iiiz day incorporiLed under, the Comp;niea Ordinance 1984 (XLVII' of 1984) and.Lhat

shr es
: the company is limited by

Ls1ainabd
Given under my hand at

Murch
day of

n1rty-r1ve
911C thousand nine hundred and

78,500/-(Rupees Seventy c-ht thousand & rivg hundred;

Feefla.

(NAZ1R AHJ4L.D SHMIEl4)

01iPUTY REGISTRAR
OF COMPANIES

CR0-I

Thu: U?i-
'crP u,/2iaaI,3-,4/oceLF-.2.14-I seas Lae. - ------,-----

C'
Tioe sI;mai
.crflfUtT'.l TfOL
 ANNEXURE D
KE POW1R PURCHASE CONSENT
 Ref: CEOSEC_199_061221
Dated: December 6, 2021

Mr. Tabish Tapal

Chief Executive Officer
Tapa Energy (Pvt.) Limited ("TEL")
F-25, Block 5, Rojhan Street
Kehkashan, Clifton
Karachi

Subject: Extension to the PPA Term Expiring on 19! June 2022

Dear Mr. Tabish,

We have received your letters no. TEL/KE/016/22 dated September 21, 2021 and TEL/KE/031/22
dated November 26, 2021 regarding the subject. We would like to inform you that KE is
principally willing to continue purchasing power from TEL via an extension of the PPA subject to
the fulfillment of the regulatory requirements and provision of necessary approvals.

•Please note that we would initially seek an extension of one (1) year only and consider any future
extensions on a year-on-year basis. We understand that TEL and KE would be required to
undertake the standard regulatory process which would include filing of tariff and negotiate a
revised PPA/extension. It is therefore suggested that our teams get together and formalize the
plan going forward.

Look forward to continuing our arrangement.

Yours Sincerely,

Syed Moonis Abdullah Alvi

Chief Executive Officer

* KE House, 39-B, Sunset Boulevard, Phase-Il, Defence Housing Authority, Karachi

www.ke.com.pk © 92-21-3263-7133, 92-21-3870-9132, UAN: 111-537-211
 Ref: CEOSEC_247_13042022
Date: April 13, 2022

Tabish Tapal
Chief Executive Officer
Tapal Energy (Pvt.) Limited ("TEL")
F-25, Block 5, Rojhan Street
Kehkashan, Clifton
Karachi

Subject: Extension to the PPA Term Expiring on 19th June 2022

Dear Mr. Tapal,

We write this in continuation to our previous letter vide ref no. ceosec_199_061221 dated 06
December 2021, regarding the subject.

We would like to inform you that KE is willing to seek an extension of two (02) years with TEL
while any further extensions may be considered later on a year-on-year basis. Further, we
understand that TEL and KE would be required to undertake the standard regulatory process
which would include filing of tariff and negotiate a revised PPA/extension. It is therefore
suggested that our teams get together and formalize the plan going forward.

Look forward to continuing our arrangement.

Yours Sincerely,

Syed •onis Abdullah Alvi

Chief Executive Officer

KE House, 39-B, Sunset Boulevard, Phase-Il, Defence Housing Authority, Karachi

www.ke.com.pk . 92-21-3263-7133, 92-21-3870-9132, UAN: 111-537-211
 ANNEXURE E
XE CAPACITY FACTOR CoNFrnMATIoN

54
.lmran Adhi

From: Mudassir Zuberi <[email protected] >

Sent: ' Friday, February 18, 2022 6:50 PM
To: Mustafa Lakdawala
Cc: Faizan Pasha, Muhammad; Fahad Najmi; Fahad Mazhar; Tabish; Mohammad imran;
Raza Abbas
Subject: RE: Extension to the PPA Term Expiring on 19th June 2022

Dear Mustafa sb,

Pis find below indicative monthly dispatch numbers for the 1 year extension. PIs understand these numbers have.
been projected based on tentative calculation and are dependent on various factors that we had mentioned in our
last email including but not limited to gas supply, BQ 3 dispatch, system demand, supply from NTDC etc. Accordingly,
these numbers may vary. Thanks

We are available to discuss further.

onth wise expected dispatch

Month Utilization
Jan 0.00%'
Feb 0.00%
Mar 0.04%
Apr 6.73%
May ., 32.78%
Jun 74.87%
Jul 96.39%
Aug 63.16%
Sep 88.50%
Oct 0.68%
Nov 0.00%
Dec 0.00%
Yearly Utilization Q.38$.

r(egards,

Mudassir
• tmran Adhi

From: Fahad Mazhar <[email protected]>

Sent: Friday, April 22, 2022 5:45 PM
To: Mustafa Lakdawala
Cc: Faizan Pasha, Muhammad; Fahad Najmi; Tabish; Mohammad lmran; Raza Abbas;
Naz Khan; MudassirZuberi
Subject: RE: Extension to the PPA Term Expiring on 19th June 2022

Dear Mustafa Sb

PIs see below indicative Annual and monthly dispatch numbers for the extension till FY-24. Kindly note that these are
projections based on tentative calculations and are highly dependent on various factors including but not limited to
system demand, gas supply, supply from NTDC etc. Accordingly, these numbers may vary in future.

Tentative Annua' Utilization: '3O%

Téntätiver Mothlyuti1ization
Month Utilization %
July 2023 91%
Aug2023 40%
Sep 2023 79%
Oct 2023 26%
Nov 2023 0%
Dec 2023 0%
Jan 2024 0%
Feb2024 0%
Mar2024 10%
Apr 2024 3%
May2024 31%
June 2024 74%

We are available if any further discussion is required in this regard.

Regards
Fahad Mazhar

From: Mustafa Lakdawala <[email protected] >

Sent: Friday, April 22, 2022 12:22 PM
To: Mudassir Zuberi <[email protected] >
Cc: Faizan Pasha, Muhammad <[email protected] >; Fahad Najmi <[email protected] >; Fahad Mazhar
<[email protected]>; Tabish' <[email protected] >; Mohammad lmran
<imrantapalenergy.com.pk>; Raza Abbas <razatapalenergy.com.pk>; Naz Khan <[email protected] >
Subject: Re: Extension to the PPA Term Expiring on 19th June 2022

(External Sender niustafa@tapalenergy. com.pk ]

Dear Mudassir,

As discussed please expeditel With our hearing notice issued by NEPRA the modification will get more complicated
with further delay by KE th providing the dispatch factor for the 2nd extension term.

1
 ANNEXURE F
GENERATION LICENSE

55
 National Electric Power Regulatory Authority
fslamic Republic of Pakistan
2nd Floor, OPF BuUdipg, G-512, Islamabad.
Ph: 920720Q Ext: 330— Fax: 9210215
Registrar E-mail : [email protected]
Direct Phone : k051) 9206500

No.NEPRRiLAG -11/S-4 3b.V.2003

Chief Executive,
MIs. Tapal Energy (Pvt) Limited
F-25, Block 5,
Kehkashan, Clifton
Karachi

Subject: Grant of Generation Licence IPGL/OlO/2003

Licence Application No. LAG 11
M/s. Tapal Energy (Pvt Limited

Please refer to your application No. TEL/ACCfl/79/01 dated 0.05.2001 for a

Generation Licence.

2. Enclosed here is Generation Licence No. IIPGJJO1O/2003 granted by the Aithority to

MIs. Tapal Energy (Pvt) Ltd. The Licence is granted to you pursuant to Section 15 of the
Regulation of Generation, Transmission and Distribution of Electric Power At (XL of 1997).

3. Please quote above mentioned Generation Licence No. in your futuaie coiespondence
with the Authority.

DAJAs above.

(Mahjoob Ahmad Mirza)

Copy for infornation to Director General, Pakistan Environmental P otection Agency,

44-B, Office Tower, Blue Area, Islamabad.
National Electric Ppyer
(NEPI
Islainäbad —
 Generation Licence
Tapal Energy (Pvt) Limited

Article I
Definitions

(1) In this Licence:

a. "Act" means the Regulation of Generation, Transmission and
Distribution of Electric Power Act,. 1997 (XL of 1997);
b. "Agreements means any or both of the Implementation Agreement
and the Power Purchase Agreement,
c. "Authority man the National Electric power Regulatory Authority
constituted under Section 3 of the Act, or any successor thereof;
d. "Implementation Agreement" means the Implementation Agreement
dated 8 August 1995 between the Licensee and the President of
Pakistan;
"Licensee" means Tapal Energy (Pvt) Limited;
f. "Power Purchase Agreement" means the Power Purchase Agreement
dated 26th September 1.995 between the Licensee and the power
purchaser thereof and for the due performance of which a sovereign
guarantee has been executed by the Government of Pakistan;
g. "Rules" means the National Electric Power Regulatory Authority
Licen sing (Generation) Rules, 2000, as amended from time to time;

• (2) Words and expressions used but not defined, herein bear the meaning
given thereto in the Act or in the Rules.

Article 2
Application of Rules

(1) This Licence is issued subject to the provisions of the Rules, as amended
from time to time.
0 WEfl

A c!STRA

c'j

Page 1 of5
 Generation Licence
Tapal Energy (Pyt) Limited

(2) During the subsistence of the Agreements entered into by.the Licensee
prior to the enactment of the Act, nothing contained in the Rules or this
Licence shall be applied in a. manner which is inconsistent with the
Agreements and materially increases the obligations or impairs the rights
of the Licensee under the Agreements..

Article 3
Generation Facilities

(1) The location, size, technology, interconnection arrangements, technical

limits technical functional specifications and other details' specific to the
generation facilities of the Licensee are set out in Schedule I to this
Licence.
(2) The net capacity of the generation facilities is set out in Schedule II hereto.

Article 4
Term

Pursuant to Rule 5 of the Rules, this Licence is' granted for a term' of
Fifteen'(15) years.
Unless revoked earlier, the Licensee may, ninety (90) days prior to the
expiry of the term of the licence, apply for renewal of the Licence under
the Licensing (Application and Modification Procedure) Regulations, 1999.

Article 5
Licence Fee

The Licensee shall pay to the Authority the Licence, fee in the amount and
manner and at the. time specified in the National Electric Power Regulatory
Authority (Fee) Rules, 2002. '
r.

IREGISTRAR

(NEP.RA ,,/ ' Page 2 of5

 Generation Licence
Tapal Energy (Pvt) Limited

Article 6
Competitive Trading Arrangement

(1) During the subsistence of the Agreements entered into by the Licensee
prior to the enactment of the Act, the Licensee shall have the option o
participate in such measures as may be directed by the Authority from
time to time for development of a Competitive Trading Arrangement.

(2) Any variation or modification in the Agreements under the foregoing sub-
article (1); for allowing the Licensee to participate.wholly or partially in the
Competitive Trading Arrangement shall be subject to mutual agreement of
the parties thereto and such terms and conditions as.may be approved by
the Authority.

(3) In the event that the Licensee exercises its option to participate wholly or
partially in development of the Competitive.Trading Arrangement under
the fore-going sub-article (1), the Licensee shall in good faith work
towards implementation and operation of the aforesaid Competitive
Trading Arrangement in the manner and time period specified by the
Authority and in doing so, the Licensee shall not by any act or omission
impede the development, implementation or operation of the Competitive
Trading Arrangement.

Article 7
Maintenance of Records

For the purpose of sub-rule (1) of Rule 19 of the Rules, copies of records and
data shall be retained in standard and electronic form and all such records and
data shall, subject to just claims of confidentiality, be accessible .by authorized
officers of the Authority.

REGISTRAR

Page 3 of 5
iNFPR
 Generation Licence
Tapal Energy (Pvt) Limited

Article 8
Compliance with Performance Standards

Subject to the provisions of Article 2(2), the Licensee shall comply with the •
relevant rules on performance- standards as may be prescribed by the Authority
from time to time.

Article 9
Compliance with Environmental Standards

The Licensee shall, to the full satisfaction of the relevant competent authority,
comply with the environmental standards as may be prescribed by the aforesaid
relevant competent authority from time to time.

Article 10
Provision of lnformation

Subject to the provisions of Article 2(2), the Licensee shall provide to the
Authority all such information as the Authority may require.

Article 11
Revocation and Suspension

(1) In exercising. its powers to suspend or revoke the Licence under Section
28 of the Act, the-Authority shall issue a show cause notice ofa period not
less than 30 days.

(2). Pursuant to the powers under Rule 8(4), the obligations of the Licensee
under Rule 8(3) stand modified to the extent of inconsistencies with the
Agreements and in the event of termination of the Agreements, the
Authority may revoke or suspend this Licence.

Page 4 of 5
4

Generation Licence
Tapal Energy (Pvt) Limited

Article 12
Approvals and Authorisations

Notwithstanding the provisions of Article 11(2), the Licensee shall apply to the
Authority, where required, for approvals and authorization under the Rules1
including without limitation, the approvals and authorisations under Rule 8, Rule
10 and Rule 14.

PageS of5
 Generation Licence
Tapal Energy (Pvt) Umited

SCHEDULE I

MTNTM(JM FUNCTIONAL SPECIFICATIONS

'Thc.Cornplex consists of one (1) land -based powerplant comprised of twelve (12) residual Fu1 oil
('RFO') fired dicsel generating scts (each a (Unit?) with the following design ratings:

1. Gross Capacity under ISO 3046 (Latest Vcrsion as of the date of this Agreement)
a. Diesel generating unit at alternator terminals 10500 kW per Unit
b; MultipHe by twelve (12) Units 126,000 kW for the Complex

Dc-aI.ing from ISO standard conditions to Reference Conditiois 2,500 kWc for the Complec

Gross Capacity after derating 123,500 kW for the Cornple

4... Estimated auxiliary consumption for the Complx 4,000 kW for the Complex

5. Estimated Dependably Capacity of the Complex at

the 132kv busbar under Reference Conditions 119.500 MVf

The Site is located off Hub River Road, South of Hub Chowki, in the District of Karachi West, Sindh
Province.

The Site arca is characterized as tropical. Average rainfall is 700 mm per year, but (hIs amount Calls in
short durations. Reference Conditions at the Site are:

AMI3 LENT ALP. TEMPERATURE = Tj '30 deg. C = 303 K.

LRQE AIR COOLANT TEMPERATURE T 40deg.0 313K WE

TOTAL BAROMETRIC PRESSURE Pr = 1031.2 mbar

REGISTRAR

RELATIVE HUMIDiTY =80%

INEPRAI

A maximum earthquake design factor of 0.1 g will be utilized for the design of the plant building.s and
structures and the design wind speed will be 40rn/sec.

The Site will be at elevation <65 in with respect to mean sea level (MSL). All structures will have a
ground floor elevation of at least 20 in above MSL. Access tdthe Site will be provided by a road. The
main poWer block consists of twelve (12) RFO fired diesel generating sets. Ot1iei plant' buildings and
structures outside olihe main powcr blockinclude, but are not limited to. the rollowing:

91
uft4FC VAL1EEJE 1GtI (PYT't io chedu1e I
t. .A.fl I.tl ! *
2 ?
 Generation LicencF
Tapal Energy (Pvt) Limited

SCHEDULE I

Fuel Storage Area;

Combined Fuel Treatment! Boiler (for heating RFO only) / Water Treatirient House;
Fire Fighting Basin;
Workshop I Stores;
Office l3uilding;
Switchyard;
Guardhouse.

The Complex will use a• simple cycle diesel generating sets 'with waste hearecovery to heat the RFO
vstetns.

oolin will be supplied via a radiator cooling system. The primary fuel will be RFO, with Light Fuel
Oil (tLFO') being used for flushing the engines and for L'FO fired boilers.

Each generator will, be nominally rated at 1Jl25 kVA., 0.8 lagging and' 0.9 leading power factar
I 1,000 V. 3 'phase, 50 cycle, not less than 0.55 short circuit ratio. .Each generator will be air cooled..

The Complex will be capable of oration within, a voltage range of± 10% on the 132 kV system.

The. Complex witl have 'three main stepup transformers, each rated not less than 58.6 M\'A,
132111kV, ONAF.

Interconnection with the KESC system will be via a 132 kV, awitchyard located on the Complex.

A common conu-ol room is provided to monitor and, control the Complex. Operator interfaces for
control of the Cbinplex 'will be via control panel and PC operaing stations and each Unit will be
ci 'le of being: started and stopped. locally. The plant control systems include a data acquision
sm.

Fuclupply'to the Complex will be via road tanker delivery. The Site will have suflicient RFO storage
capacity to support operation of the Complex fOr. the equivalent of 100 ~ of fill load for 30 Days,

All material, ptantç equipment and machinery incorporated in the construction of the Complex shall be
new and unused.

Page2of 43 :'SihedUleI:
92
'/ALL'.i 4 :' CFYT'% L,r.
':
 Generation Licence
Tapal Energy (Pvt) Limited

SC]flDULE 2

TECHNICAL LIMITS

1. Design Limits

l•.l Unit Starts

• (a) The notice required by the Company to start-up the Complex or Unit(s) and
synchronize to the KESC Grid System will vary according to the length of
time the Complex or Unit(s) has been shudovn. Table I below shows (lie
length of notice required against various periods of shutdown.

Table I

Lentth df Shutdown Notice recuired to synchronize

(I) Not more than 2 hours 20 minutes

(ii) More than 2 hours but 60 minutes

•not mare than 8.hours

(iii) More than 8 hours but 2 hours

not more than 32 hours

(iv) More than 32 hours but 4 hours

not more than ISO hours

(v) More than 1 50 hours 7 hours

(b) For the purposes oithis Schedule start up of the Complex or Unit(s) is
classified as follows:

uHotStartl( - A start following a shutdown period as per (i)(ii), (iii)

or (iv) above.

Cold StartH - A start following a shitdown period as per(v) above.

LMFEJF. VALLEEJE (PYfl ti

h e3 of 13 : SchedulcI
2?S&l95
'tSM? rc.0
 Generation Licence
Limited
TapalElleraY (Pvt)

SCHEDULE 2

and the reference to starts,. starting or started means the process of starting
the Complex or Unit(s) and syrichroning it with the SC Grid System.

(c) The notice required to synchronize uiider.item (i) above shall apply provided
the previous hutdown was no the result of a vip.

(d) Starting of the Complex shall be subject to the fo1long limits for each Unit:

Tabie2 c

Total aggregate Maximum number

maximum number of starts per
lype of Stai-ts of starts year

Hot Starts 1
No technical limitations
Cold Starts. J
1.2 Complcx loading

(a) The Compex load ramping rate is the stady tate at which the load can be
raised. The maxinium load ramping rates are shown beloi in Table 3A:

Table3A

• Complex Load Cold Start HotS tart

Rne: % per minute % per minute

(i) O~25 .5 6:

(ii) >25~50 . 5 6

(iii) > 50~ 100 4. 5

Complex load percentages in this Table 3A refer to the stun of the load(s) at
the generator terminals, of the Units already sychronized to the KESC Grid
System'as a percentage of gross capacity of the Complex speci1id in Section
.3 of Schedule 1.

94

Pagp 4 of 13 SchedUle I
'Ptf
Atjft!
, 7 n tnr
 GenertiOfl Licence
Tapal Energy (Pvt) Limited

SCHEDULE 2

(b) :The Unit load ramping rate is the steady rate at which the load can. be raised. The maximum
• Unit load ramping rates are shown below in Table 3B:

•Tnble3B

Unit load range. % Cold Start (MW / mm.) Hot Start (MW I min.

(i) 0~25 •0.8

(ii) >25~50 0.8
(iii) >50~ 100 0.8

Unit load percentage in the Table 3B refers to the load at the generator
terminals of the Unit as a percentage of the gross capacity of the Unit
speciied in Section La. of Schedule 1.

(c) Step changesin Despatched load of up to 20% are allowable provided that
Complex load is greater than 30%. of gross capacity of the Complex specified
in Section 3 of Schedule]. After such step change the new Complex load
must be held constant for 5 minutes for stabilization purposes, or for a pro
•rata period for1esser step changes.

(d) The Complex can withstand a full load rejection and tcmairi in a safe
èondition. Provided the Complex auxiliaries are operated continuously, the
Complex can be re-synchronized within one hour provided that the reason
for the load rejection has been removd.

• (e) The Complex minimum continuous loading shall be 6% of the gross capacity
of the Cmplex specified in Section 3 of Schedule 1.

1.3 Frequency. Power Factor. Voltage Limits and Droop Settings

(a) Tle Complex will operate at 100% load with a power factor in the range 0.8
lagging to 0.9 leading which range shall not be exceeded. At 0% load the
Complex has a Reactive Power capability of 144 MVARlnggiiig and 91.2
MVAR leading. At I 00% load the Complex has a Reactive Power capability
of 104.4 MVAR lagging and 72 MVAR leading.

(b) The Complex can operate within the range ± 10% on the 132 kV high
voltage system whkh range shall not be exceeded.
OVIEt
I •. ç

REGISTRAR

Page 5 of i 3 Schedule I
(NEPRA)
F7- UiE41 tt :$t(S (?1'fl t.
 Generation Licence
Tapal Energy (Pvt) Limited

SCHEDULE 2

(c) The ompkx can operate within the frequenc)' range 47 Hertz to 53 I-kriz
which range shall not be exceeded.

(d) The Complex will be subject to tripping if frequency and/or voltae

fluctuations outside the ranges stated in 1.3(b) and 1.3(c) above occur.

(e) The Uriitgovemor droop is adjustable in the range 0%..to 10%, the
automatic voltage regulator droop setting is adjustable in the range ± 10% of
rated voltage with a droop characteristic of± 0.5%.

1.4 General

(a) The Company shall adviseKESC of any teuporary operzitrng constraints and
limits which may from lime to time apply to the Complex.

2. Design Maintenance Limits

The éycle of Scheduled Outages is set out in Tnblç. 4 below together with a manufacturer's
recociniended duratiori for such inspections.

TABLE 4•

Major items and Operating hours Estimated duration

nature of maintenance interval for each of each activity
per 12 Month periods maintenance activity per unit

Change of Oil in TurboCharger • 1000 2 hours

• Change of Fuel Pilters • 1000 4 hours
Change Lube Oil Filters 1000 4 hours
Check of Valve Clearance 1000 5 hours
C1icbl of Alarm and Stop/Safety Devices 1000 15 hours
Inspection of Injectors 1000 10 hours
Chang Oil in Governor 2000 hour
Cleaning of Air Coàlers 2000 10 hours
Inspection of Crankcase 4000 2 hours,
CheckorCrankshafI Alignment 400Q 4 hours
Inspecion of TurboCharger 4000 5 hours
,Jnspecion of Pistons 8000 2 hdurs(per piston)
10 ER
•1nspecion of Engine Driven Pumps 4000 10hburs

REGISTRAR

96

'i'..! i-.i 4 cr'r t I Page 6of 13 :Schedulel

(flI!. -
2.
 Generation Licence
Tapal Energy Pvt Limited

SCHEDULE 2

1nspectior of Thermdstati Valves '1000 8 hours

Required time per year (including oilier activites 720 hours

Scheduled Outages thereafter continue on a one year cycle which thust be inairitained.

The scheduling of maintenance inspections will be compatible with manufacturer's

requirerneiits. All inspections required in accordance with manufacturer's specifications will be
• carried•ouduring Scheduled Outages. In additiorito the above annual Scheduled Outages,
• 72Q hours of Scheduled Outages shallbe allowed for every fifth (5th) year for. overhtil items
• of work as shown fri Table 5.

TABLE 5

Estimated duration
of each activity
per unit

Piston àverhaul 40,00 90

Cylinder lirer overhaul 40,000 274
TurboCharger overhaul 40,000 120
Fuel Injcctioh Purnp.overliau! 40,000 18
Inspection / bvcrhauFof Main Bearings 40,000 108
Check ofDbiper 40,000 5

3. Prudent Utility Practice

NotwiLhstaning anythiig to the ontrary the Company shall operat and maintain the
Complex in accbrdance with Prudent Utility Practices.

4. While the Complex is under the control ofAGC, KESC shall ndt remotely control the Sta-up,
synchronization to the Grid System or shutdoi.iiiof any of the individual dieel generating units
at the Comp1x..

97

LMF1F. VALtE.iE t 3O1 ('yI•) I. TI

2 7 SEP 1995 Page 7 df 13 : Schedule I

TtANSMlNEL
 Generation Licence
Tapal Energy (Pvt) Limited

SCHEDULE 3

INTERCONNECTrON FACIL1I S AND TRANSMISSION FACILITIES

1. Interconhebtion and Transmission Facilities

• (a) The connction between the Comp1e and KESC1s network shall be through
• 132 kV double circuit transmission lines, one originating from the Baldia grid
station and the bther from Hub Chowki grid station... The transmission line
each Will terminate in the substation of the Complex; the location of which is
shown on the Site plan attached as Figure 1. The circuits of the transmission
lines will cnneçt at bushings provided by the Company as shown on the
single Iine diagram of the Complex substation attached • as Figure 2. The
boundaxy of responsibi!ity between the Company and KESC will bèat the
top of the bushings (ti'e "rntercpnnection Point'). The Company will provide
KESC. with an earth connection from the earthing system of th Complex.
KESC wilflnstall the Metering System (on the 132 kV side of the Complex's
transformers) which together with the transmission lines referred to above
• within th Site boundary shall omprise the "Interconnection Facilities.0 This
equipment will remain, the property ofKESC and shall be commissioned and
maintained therafier bvK.ESC.

(b) Protection. A carrier intertripping circuIt for each traiisrriission line shall be
providedbetween the line circuit breakers at the Complex d'n by the
Company and the line &cuit breakers at Baidia and Hub. Chowki grid
stations owned by KESC.

Design Data

• The following design data has been provided by the Company to KESC to enable completion
ofKESC of the design of the rnterconnection Facilities and the Transmission Facilities.

2.1. GencratorDisign Data

(a) Tating
A

Rating 13,125 kVA

Power fhctor 0.8 lagging
REGISTRAR 0.9 leading
1• •
Number of phases 3
Number of poles 10

98

Page 8 of 13 Schedule I
4Mfl'F. \.. 4
t •1 .ui
 Genóration Licence
Tapal Energy (Pvt) Limited

SCIEDULE 3

Frequency 50Hz+%
Rated speed G00 rpn.
Tetminal voltage 11kV±I0%
Short circuIt ratio at rated MVA not <0.55
Excitation system brushless

(b) Generator Rèactances (at the rated MVA & kV base)

Unsaturated direct axis synchronous reactance 190%

Saturated direct axis sub-transient reactance 22.7%
Saturated direct axis transient reactance 33.8%
Negativephases sequence reactance 24.7%
Zero phase sequence reactance 12.8%
Leakage reactance 0.01 perunit

Generator time constants

Direct s open circuit time constant 4.500 seconds

Direct axIs open circuit sub-transient time cpnstant 0.037 seconds
Direct axis short circuit trans-transient time constant 1.000 seconds
Direct axs short circuit sib-transient time constant 0.035 seconds

(d) Enertia constant

Diesel engine generator 5,050. kgm2

H= 0.69 sec
* Definition of J: J= . 0.25 GD2.

Note: The above design values will have tolerances as specified in the relevant IEC standards.

Excitation System.

Excitation f the main generator is provided by a brush! ess system using booster transformers.
The excitation ontrol system comprises of one automatic voltage regulator (AVR and one
manual cxitation control (MEC). During normal operation. ihe whole excitation system is
subject to. automatic control by means of AVR.

Technical Characteristics

(i) Voltage sctling.range for AVR operation: ± 10 %

99

4FFJVi. VALLEE ON3 (PVT LE

AR If
Page 9 of 13 Schedule I
2 7 SEP 1q95
A 1'M rc.Eu
 .Geiieration Licence
Tapa Enrgy (Pvt) Limited.
SCHEDULE 3

(ii) Voltage adjusting range far MEC operation: 90-110 %

(iii) Generator terminal voltage is held within ± .10% from no ioad to ll load a
rated frequency
(iv) Under the maximum direct current supplied from the excitation systcni for a
specified time, the ceiling voltage to the generator field voltage is 2.0 per unit
(v) The transfer function diagram of the AVR to manUal excitation system as
mentioned above is to beprovided.

2.3. Generator Transformer

MVA• rating ONAF 58.6 MVA

Rated voltage 132 kV/l 1 kV± 100/
On-Làad Tap changers ± 13.Taps
Frequency 50 Hz ±6
Connection Group Ynd5
• .I.L. 11 kV side 75 kV
]3.I.L. 132 kV dé 650kV
Tnsulation levels for impulse 145kV
rnsulatioi levels for AC withstand 275kV -.
Type of cooling ONAN /ONAF
Temperature rise wdgioil 551.50°C
Maximum system short circuIt power 10 OVA
Impedance and Losses at reference power at nominal tap 58.6 M•fA
Impedance 12% HV to LV
Nc Load Losses 30kW
Load Losses 230kW
Auxilary Losses 4 kW
Positive Reactance LJl3% •
Zero Sequence Reactances. Za=9.6 %

• i. .E-113-L (Leakage)
ii. I I-T (Leakage)
iii. L-.T (Leakage)
Magnetizing reactance at rated voltage (from H.V. terminal).
X air core (from H7V. terminal)
X air core (from L.V. terminal)
Saturation cul-ve at no load V. (mis)
Versus ((mis)

* Data to be supplied by

REGISTRAR

100
.JNEPRRA)

lt ni ua

2 ' E P l5 Page 10 of 13 : Schedule I

i
 Generation Licence
Tapal Energy (Pvt) Limited

24 The governor droop will be adjustable from 0% to 10 % and is designed to operate ovr Ui
fiequenc'y range 47 to 53 Hz.

2.5 The AVR droop setting is ± 0 to 10 % oF rated 'olLge1 with a droop characteristic of± 0.5 %

i/7

I0l LMFJJFC. VAtt1f ti in?i C?YVJ . Ii

2. 7 SEP 5
'MSMI r T u
Page 11 of 13:Schedulel
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 Generation Licence
Tapal Energy (Pvt) Limited

INSTALLED CAPACITY (GROSS) & NET CAPACITY

Installed ISO (Gross) Capacity 126MW

Net Capacity 119.5MW

Note: Net Capacity — These are indicative figures only as provided by the Licensee.
The ziet capacity available to NTDC for dispatch and other purchasers will be
determined through procedures contained in the Agreements or. Grid Code.

Page 1 of I: Schedule II
 ANNEXURE G
NEPRA FIRsT MomFIcATIoN APPROVAL
 -.'J,.. National Electric Power Regulatory Authority
I,"
Islamic Republic of Pakistan
Jlj' I.,

;.c •P,,... ..4

'

NEPRA Tower, Attaturk Avenue (East), 0-5/I, Islamabad.

Ph: +92-51-9206500, Fax: +92-51-2600026
Registrar Web: www.nepra.org.pk, E.maffl registrarnepra.org.pk

No.. NEPRA/R!LAG-11/ 1. -9 November20, 2018

Mr. .Mustafa Lakdawa1a

Chief Financial Officë.
Tapal Energy (Prrate) Limited
F-25, Block5, Rojhan Street
Kehkeshaii, Clifton, Karachi

Subject: Mödificatio,n Generation Licence No. IPGL/010/2003

Licence Application No. LAG-il
Tapal Energy (Private) Limited. (TEPL)

Reference: TEPL.'s LPiVfsubniittedvide letter No.. TEL/NEPRA/006/18 ckited,22-05-2018 receivecl on

24-05-2018,)

It is intimated that the Authority, has approved Modif cation in Generation Licence No.
JPGL/010/2003 dated August 26, 2003 in. respect of Tapal Energy (Private) Limited (TEPL) pursuant to
Regulation 10(1 1)(a) of the NEPRA Licensing (Application and Modification Procedure) Regulation
1999.

2. Enclosed please find herewith det&mination of the Authority in the matter of Licensee Proposed
Modification of TEPL alongwith Modification-I in the Generation Licence No. IPGL/010/2003, approved
by the Authority.

Enclosure: As Above

(Syed Safeer Russain)

Copy to:

1. Secretary, POwer Division, Ministry of Energy, 'A' Block, Pak $ecretariat, Is.Iainabad'
Managing Director, Private Power & Infrastructure Board (PP1B), Ground & 2nd Floors, Emigration
Tower, Plot No. 10, Mauve Area, Sector G-8/l, Islamabad
3. ManagingDirector, NTDC, 414 WAPDA House, Lahore
4. Chief Executive Officer; CPPA(G), GoUnd. Floor, Eñercon Building; G-5/2, Islamabad
5, Chief Executive Officer, K-Electric Limited, KEHouse, 39-B, Sunset Boulevard, Phase-lI, DHA Karachi
6 Directoi Genera! Envuonmental Piotection Agency Government of Sindh Plot No ST//l Sector 23
Korangi 'Industtial Aiea, Karachi
 National Electric Power Regulatory Authority
(NEPRA)

In exercise of the Powers conferred upon the National Electric

Power Regulatory Authority (NEPRA) under Section-26 of the Regulation
of Generation, Transmission and Distribution of Electric Power Act, 1997,
(XL of 1997), as amended or replaced from time to time, the Authority
hereby modifies the term of the Generation Licence (No. 1PGL101012003,
dated August 26, 2003) granted to Tapal Energy (Private) Limited. The
changes made in the Generation Licence are described in the attached

This Modificaton-1 is given under my hand on of November

 Generatkn Licence
Tapal Energy (Private) Limited
Deh Gondpass, Tapo Gabopat
Hub River Road, Táluka & District Karachi
in the Province of Sindh

Annexure-A

Page 1 o?2
ModiticationI
 Generation Licence
Tapal Energy (Private) Limited
Deh Gondpass, Tapo Gabdpat
Hub giver Road, Taluka & District Krachi
in the Province of Sindh

Modification-I
in Generation Licence (No IPGL/01012003, dated
Auqust 26, 2003) of Ta pa! Enerqv (Private) Limited

(A). Face Sheet

On the Face Sheet (i.e. the first page of the generation licence), in
the last line the phrase "expires on 25th day of AUgust, Two
Thousand & Eighteen' is deleted and is replaced by the phrase
"expires on 19th day of June, Two Thousand & Nineteen."

(B). Article-4

(i). Article-4(1) of The generation licence is rephrased as "the term of

this Licence is valid upto June 19, 2019."

V
Page 2 of 2
Modification-t
 National Electric Power Requlatory Authority
(NEPRA)

Determination of the Authority

in the Matter of Licensee Proposed Modification of
Tapal Enerqy (Private) Limited

November ,2018
•Case No. LAG-Il

(A). Backqround

(I). Tapal Energy (Private) Limited (TEPL) has set up a 126.00 MW

Residual Furnace Oil (RFO) based generation facility/thermal power plant at Deh
Gondpass, Tapo Gabopat, Hub River Road, Taluka & District Karachi, province
of Sindh as an Independent Power plant, under the Power Policy of 1994.

(ii). The Authority granted a generation licence (No. IPGLIO1OI2003,

dated August 26, 2003) to TEPL in terms of' Section-15 of Regulation of
Generation, Transmission and Distribution of Electric Power Act, 1997 (XL of
1997), as 'amended or replaced' from time to time ("the NEPRA Act"), for a term
of fifteen (15) years from the date of issuance of generatipn licence up to August
25, 2018.

(B,). Communication of Modification

(I). TEPL in accordance with Regulation-10(2) of the NEPRA

Licensing (Application & Modification Procedure) Regulations, 1999 ("the
Licensing Regulations") communicated a Licensee Proposed Modification (LPM)
in its above mentioned generation licence on May 24, 2018.

(ii). In the "text of the proposed modification", TEPL stated that, the
communicated modification envisages extension in the term of its above
mentioned existing licence to make it consistent with the te'rm of Power
Purchase Agreement (PPA) that ha., nRj i with K-Electric Limited (KEL)

Page 1 of 8
 (iii). Regarding the 'statement of 1ie reasons in sUpport of the
modification", TEPL inter alia submitted that in order to discharge its contractual
obligations under the PPA, it is required to obtain and maintain, a generation
!icense from the Authority for The term of the PPA. In this regard, TEPL
emphasized that the maintenance of a valid gënerätioh Iicehse is a critical
regulatory consent without which the Company cannot perform its contractual
obligations under the PPA.

(iv). About the statement of "the impact on tariff', "quality, of service

(QoS)" and "the performance by the licensee of its obligation under the licence",
TEPL stated that proposed changes will not result in any post yaria on and
wOuld not have any additional financial implcatior. Further, TEFL also
confirmed that QoS and the performance under the existing generation licence
would not be affected by the proposed modification.,

(C). Processinq of LPM

(i). After completion of all the required information as stipulated under

the Regulation-10(2) and 10(3) of the Licensin.g Regulations by TEPL, the
Registrar published the communicated LPM on June 11, 2016 in one (01)
English and one (01) Urdu newspaper, informing the general public about the
communicated LPM and inviting their comments within a period of fourteen (14.)
days from the date of the said publication.

(ii). After completion of all the required information as stipulated under

the Regulation-10(2) and 10(3) of the Licensing Regulations bythe Licensee, the
Registrar published the communicated LPM in one (01) English and one (01)
Urdu daily newspaper on June 02, 2018, informing the general public,
interested/affected parties., and. different stakeholders about the said LFM as
required under the Regulation-i 0(4). of the Licensing Regulations.

P2ge 2 of8
 (iii).. The Registrar invited comments of the. said stakeholders in favor or
against the communicated LPM. Apart from the said notice in the press,
separate letters were also sent to individual experts, Government
ministrieslattached departments and other representative organizations etc. on
June 04,. 2018 inviting their views and comments fOr the assistance of the
Authority as stipulated in Regulation-10(9) of the Licensing Regulations.

(D). Comments of Stakeholders

(i). In response to the above, comments were received from five (05)
stakeholders which included Energy Department Government of Sindh
(EDG0S), KELI Board of Investment (BoI), Pakistan State Oil Company Limited
(PSO) and National Accountability Bureau (NAB). The salient points of the
comments offered by .the above mentioned stakeholders are summarized in the
following paragraphs:-

(a). EDGoS in its comments submitted that the Authority in view of

the rising demand of the city of Karachi, may consider the
reqUest of TEPL for modification ip its generation licence;

(b). KEL remarked that it executed the PPA with TEPL which had
an initial term of twenty-two (22) years which willl be expiring
on June 19, 2019. However, the generation license awarded
to TEPL expires on August 25, 2018 falling, ten (10) months
short of the term Of the. PFA. In order to fulfill its obligations
under the PPA, the companyllEPL is required to have a valid
generation license for the full PPA Term. Therefore, K-Electric
supports the request of TEPL to extend the validity of its
generation licence on the requested terms. In this regard, it is
pertinent to mention that company has maintained the desired
quality of service and generally performed in accordance with
the provisions :Of the PPA which has helped serve the
customers in licehsedterritoiy qf KEL;

Page 3 of 8
(c). Bol submitted the energy sector is priority sector of the
Government to cater the short fall in the country. Bol bein an
investment promoting and facilitating agency has also been
making its efforts to attract investment in the energy sector.
BOI Understands that affordable and smooth supply of energy
is the back bone for industrial growth as well as attracting FDI
in the country. Bol is of the view that we may encourage the
investors in any sector of the economy including energy
sector as well;

•(d). P30 remarked that it has a continuing business relationship

with TEPL and has been making fue[ oil supplies to its plant
under a valid FUel Supply Agreement (FSA) under the Power
Policy of 1994. In consideration of the said, TEPL is bound
under clause 3.1 of the FSA to purchase all its requirements
of Fuel, Diesel Oil, Greases, Lubricants and Additives for its
power plant from PSO being the sole supplier during the term
of the FSA. However, TEPL is in breach of the provisions of
the FSA as it has failed to draw fuel oil from it on a continuous
basis. PS'O' has already communicated its reservation's
regarding the purchase of fuel by TEPL from other sources
which is a violation of the provisions of FSA diluting the
overall Security Package, which essentially comprises of the
FSA, along with the PPA and Implementation Agreement (IA).
The company continues to meet its fuel oil requirements from.
other ources with partial supplies to a very low proportion of
its actual consumption from P30. Therefore, the Authority is
,requested tc direct TEPL that it should discontinue .purchase
of fuel oil from sources other than PSO in line with FSA and
the Generation licence should be continge.nt upon the
extension of the FSA corresponding to the same time period';

Page 4 oB
 (e). NAB remarked that.the. matter is a pure technical subject and
apparent[y have no relevance to th:e Bureau. In view of the
said, the Authority may proceed as per law and rules.

(ii). The abovenientioned comments of the stakeholders were

examined it Was observed that all the stakeholders have supported the proposed
LPM. of TEPL except. PSO which has raised some. serious observations. l.n view
of the said, TEPL was directed to submit its reply to the observations of PSO In
response to the same, TEPL submitted that it :appreciates its longstanding
business relationship with PSO. It is for the information of the Authority that
TEPL has not disputed its obligation under Clause 3.1 of the FSA to purchase its
requ[rements for Fuel, Diesel. Oil, Greases, Lubricants and Additives for the
subject generation facility from PSO. However, reservation, of TEPL in respect of
purchase of fuel under the FSA relate.s to the fact that the quality of mported fuel
supplied by PSO under the FSA is not fit for the intended purpose.. Nonetheless,
the contentions raised by P80 in respect of alleged breach of the FSA are being
discussed between TEPL and PSO bilaterally. The same does not impact the
matter before the Authority. The reservations of P80 do notimpact the mattert
hand. The matter of non-conforming fuel has been discussed on numerous
occasions with P80 and the company has remained committed to its
relatronship wi.th P30, provided, that the fuel supplied is fit for the intended
purpose. Th.e 'company remains eagex to resolve this matter through mutual
dicussion and agreement with PSO.

(iii). The above submissions of TEPL were examined and found to be

satisfactory. In view of the said, it was considered appropriate to proceed further
with the communicated LPM as stipulated in the Licensing Regulations and the
NEPRA Licensing (eneration) Rules, 2000 ("the Generation Rules").

Page 5 of 8
 (E). Analysis of the Authority

(i). The Authority has examined the entire case in detail including. th.e
already granted generation licence, communicated LFM, comments of the
stakeholder, provisions of PPA & GSA, and relevant Rules, and Regulations.

(ii). In terms of Regulation-1O(5) of the Licensing Regulations, the

AUtholty is empowered to. modify a licence subject to and in accordance with
such further changes as the Authority may deem fit if, in the opinion of the
Authority such modification (a). does not adversely affect the performance by the
licansee of its obligations; (b). does not cause the Authority to act or acquiesce
in any act or omissiOn of the licensee in a manner contrary to the provisions of
the .NEPRA Act or the rules or regulations made pursian.t to it; (c). is or is likaly
to be berieficial to the consumers; (d). is reasonably necessary fot the licensee
to effectively and efficiently perrprm its obligations un.de the licence; and (e).is
reasonably necessary to ensure the continuous, safe and reliable supply of
electric power to the consumers keeping in view the financial and technical
viability of the licensee.

(iii). The Authority has observed that originally TEPL was granted the
generation licence for a period of fifteen (15) years.. Now, TEPL intends to
modify its abovementioned generation licence by extending its term till the
validIty of its FPA and TEPL has submitted that the term of its PPA is twenty two
(22) years from the COD.

(iv). In this regard, the Authority examined th provisions of the PPA

which transpired that TEPL entered into PPA with KEL on September 26, 1995
for a period of twenty two (22) years from the COD of the. project which is June
20, 1997. Therefore, the .said PPA 'is valid for twenty two (22) years only (i.e. ti1,l
June 19, 2019).

Page 6 of 6
 (v). Regarding F.SA the Authority has observed that as per provisions
of GSA entered into by TEFL and PSO on March 07, 1996, the term of the same
is also twenty years from COD of the project. Therefore, the said FSA is also
valid till June 19, 2019.

(vi). The term of a generation licence under Rules-5(1) of the

Generation Rules is to. commensurate with the maximum expected useful life of
the units comprised in a generating facility, except where an applicant consents
to a. shorter term, In this regard, the. Authority has Observed that as per
internatIonal benchmark the useful life of a diesel generator is taken as thirty
(30) years form the commissioning of the same. Therefore, though the useful life
of the generation facility of TEPL is valid till June 19, 2049, the Licensee has
requested for extension in the term of generation licence till the expiry of PPA
which is valid till June 19, 2019. Further, it is also observed that FSA entered
into, between the Licensee and PSO is also valid till June 19, 2019. Therefore,
term of the licence can be extended till June 1.9, 2019.

(vii). In view of the above analysis the Authority considers that, the
communicated LPM will not have any adverse effect on the performance of the
Licensee of its obligations as it will enable the Licensee to supply the available
energy for approximately another one (01) year. Further, the LPM will not cause
the Authority to act or acquiesce in any act or omission of the Licensee in a
manner contrary to the provisions of the NEPRA Act or the rules or regulations.
made pursuant to the NEPRA Act. The LPM will be beneficial to the consumers.
in general as cheap electricity will be available to the power purchaser for
approximately another one (01) year. The. LPM is reasonably necessary for the
Licensee to effectively and efficiently perform its obligations under the Licence.
The LPM .is necessary to ensUre the continuous, safe and reliable supply of
electric power to the consumers keeping in view the financiat and technical
viability of- the Licensee..

Page 7 of 8
(F). Approval of LPM

(I).. Keeping 'in view the term of PPA and FSA, the Authority is of the
.considered view that the generation facility of TEPL can continue its operations
and supply electric, power to 'KEL till June 19, 2019, which wifl be beneficial for
the consumers of the KEL. Therefore, the Authority hereby approves the
communicated LPM of TEPL in terms. of Regulation-10(11)(a) of the Licensing
Regulations and extends the term of the generation licepce (No.. IPGL/01 0/2003,
dated August 26, 2003) of TEPL till June 19, 2019.

(ii). Accordingly, the generation licence (No. lPGLl010I2003, dated

August 26, 2003) in the name of TEPL is hereby modified. The changes i "Face.
Sheet", of the generation licence are attached as annexure to this determination.
The approval of LPM' 'will be subject to the provisions contained in the NEFRA
Act, relevant Rules & Regulations framed thereunder, terms & coflditions of the
generation licence and other applicable documents.

Authority:

Saif Ullah O',hattha

(Member)

Rematullah
(MemberNice Chairman)

Tariq Saddozal
(Cha i rmã n)

Page 8 of'8
 ANNEXURE G4
NEPRA SECOND MODIFICATION APPROVAL

57
 National Electric Power Regulatory Authority
Islamic Republic of Pakistan

NEPRATower, Attaturk Avenue (East), G-5/1, Islamabad

Ph: +92-51-9206500, Fax: +92-51-2600026
Registrar Web: www.nepra.org.pk, E-mail: registrarnepra.org.pk

NoNEPRA/R/LAG-l1/ /--1 March 09, 2020

Mr. Mustafa Lakdawala,

Chief Financial Officer,
Tapal Energy (Private) Limited.
F-25. Block 5. RojhanStreet Kchkashan, Clifton.
Karachi-75600.
Contact No. 021-35876994-7

Subject: Modification-H in Generation Licence No. IPGL/O1O/2003

Licence Application No. LAG-U
Tapal Enery (Private) Limited (TEPL)

Reference: TEPL 's LPM submitted vide letter No. TEL/NEPJ?A/009/19 dated November 29,.
2018 i'received on November 30, 201)

The Authority has approved Modification in Generation Licence No. IPGL/0 I 0/2003 dated
August 26, 2003 in respect of Tapal Energy (Private) Limited (TEPL). pursuant to Section-26 of
the Regulation of Generation, Transmission and Distribution of Electric Power Act. 1997.

2. Enclosed please find herewith determination of the Authority in the matter of Licensee
Proposed Modification in the Generation Licence of TEPL along with Modiiicaton-lI ir the
Generation Licence No. IPGL/010/2003 dated August26, 2003 as approved by the Authority.
End: As above

i::' ,..-
1 "- '~_

(Syed Safeer Hussain)

Copy to:

I. Secretary, Power Division. Minstry of Energy, A-Block, Pak Secretariat, Islarnabad.

2. Managing Director. NTDC, 414-WAPDA House, Lahore.

3. Chief Executive Officer, CPPA-G, ENERCON Building, Sector 0-5/2, Eslamabad.

4. Chief Executive Officer, K-Electric Ltd. KE House, 39-B, Sunset Boulevard. Phase-Il,
DHA; Karachi.

5. Director General. Environmental Protection Department, Govetnment of Balochistan,

Zàrghoon Road, Quetra.
 National Electric Power Requlatory Authority
(NEPRA)

Determination of the Authority

in the Matter of Licensee Proposed Modification of
Tapal Enerqy (Private) Limited

Vcry 2O2O
Case No. LAG-Il

(A). Backqround
(I). Tapal Energy (Private) Limited TEPL) hds a generation Licence
(No. IPGLIOlO/2003, dated August 26, 2003, and Modification-I dated November
20, 2018) in terms of Section-15 (now Section-14B) of the Regulation qf
Generation, Transmission and Distribution of Electric Power Act, 1997 ("the
NEPRA Act").

(ii). The Authority granted the above generation Licence to TEPL for its
126.00 MW Residual Furnace Oil (RFO) based generation facility/thermal power
plant located at Deh Gondpass, Tapo Gabopat, Hub River Road, Taluka & District
Karachi, province of Sindh.

(B). Communication of Modification

(I). TEPL in accordance with Regulation-10(2) of the NEPRA Licensing
(Application & Modification Procedure) Regulations, 1999 (the "Licensing
egulations") communicated a Licensee Proposed Modification (LPM) in its above-
mentioned generation licence on November 30, 2018.

(ii). In the 'Text of the Proposed Modification", TEPL has proposed to

extend the term of its generation licence till June 19, 2029, in terms of Rule-5 of the
NEPRA Licensing (Generation) Rules, 2000 (the "Generation Rules"). Regarding
the "Statement of the Reasons in Support of the Modification', TEFL, inter-al/a,
submitted that the proposed modification aims to ensure that the term of the
generation licence caters to the remaining useful life of the facility. Further, the

I- \

REGISTRAR )
-'
Page lot 17
proposed modification is also essential for effective utilization of the facility,
including implementation of the PoWer Purchase Agreemnt (PP.A) term extension,
as the Licensee and K-Electric Limited (KEL) are in discussions for extension in the
term of the PPA pursuant to Clause-4.1(c) of the same, which are at advanced
stage and are expected to be finalized prior to the expiry of the current PPA.

(iii). About the statement of the Impact on Tariff", "Quality of Service

(QoS)" and "the Performance by the Licensee. of its Obligations under the Licence',
TEPL stated that it has also submitted a separate Tariff Petition before the
Authority for determination of its Tariff for the extension in the term of its PPA.
Further, TEPL also confirmed that QoS and the performance under the existing
generation licence would not be affected by the proposed modification.

(C). Processinq of LPM

(I). After cornpleUon of aH the required information as stipulated under the

Regulation-10(2) and 10(3) of the Licensing Regulations by the Licensee, the
Registrar published the communicated LFM in one (01) English and one (01) Urdu
daily newspaper on December 15, 2018, informing the general public,
interested/affected parties, and relevant stakeholders about the said LPM as
required under the Regulation-i 0(4) of the Licensing Regulations.

(ii). The Registrar invited comments of the above stakeholders in favor of

or against the communicated LPM. Apart from the said notices in the press,
separate letters were also sent to individual experts, Government
ministries/attached departments and other representative organizations, et. on
December 17, 2018, inviting their views and comments for assistance of the
Authority as stipulated in Regulation-10(9) of the Licensing Regulations.

(D). Comments of Stakehoiders

(1). In response to the above, comments were received from four (04)
stakeholders including Mr. M. Arif Bilvani, Pakistan State Oil Company Limited
(PSO), K-Electric Consumers Forum, (KECF) and KEL. The salient points of the

Page 2 of 17
comments offere,d by the aboVe-mentioned stakeholders are summarized in the
following paragraphs: -

(a). Mr. M. Arif Bilvani opposed the LPM on the premise that the
licensee is operating its Residual Furnace Oil (RED) based
single cycle power plant comprising of twelve (12) generating
sets of 10.50 MW capacity each totaling 126.00 MW gross and
1195 MW net capacity. The plant was established under the
1994 power policy and is operating since 1995 and has already
completed twenty-three (23) years of operation. Although the
generation licence of the applicant was to expire on August 25,
2018, it was extended by the Authority till June 19, 2019,
enabling the licensee to run the plant for a total period of
twenty-four (24) years. Now the icensee has again requested
the Authority to further extend its generation license for a
period of ten (10) years i.e. up to June 19, 2029, on the pretext
that "renowned independent engineering consultant" appointed
by the licensee itself has opined that the remaining useful life
of the plant is more than ten (10) years. Mr. Bilvani submitted
that he does not agree at all with the request of TEPL for the
reasons that the power plant is based on RFO fuel, one of the
dirtiest' fuels which have been already banned, by the
Government of Pakistan (GOP) in new power 'plants and is also
discouraging its use in existing power plants by curtailing their
operation to the bare minimum thereby incurring capacity
charges. Since the power plant is single cycle comprising of
small inefficient generators, the efficiency of the plant is very
low even when compared to other bigger size RED based
power plants. Auxiliary consumption and maintenance cost of
the plant is much higher compared to RLNG/Gas based power
plants due to the aging factor. RFO based power plants are the
worst polluters 'of the environment. The generation cost of this

3 of 17
 plant is much higher, although itTs a fully depreciated and debt-
free iant, because of the costly fuel compared to the
RLNG/Gas based power plants resulting in higher tariff for the
consumers and increased subsidy on part of the GoP. KEL
may make an arrangement with CPPA-G/ NTDC from which it
is already procuring 650 MW and this quantity can be
enhanced from the newly commissioned coal-fired power plant
in the vicinity of Karachi which will result not only in the
utilization of surplus power available with CPPA-G but also
result in better tariff for corsumers of Karachi. If the Authority
considers it inevitable to extend the arrangement of supply
from TEPL, the new tariff must be based on the Take & Fy
basis;

(b). PSO submitted that it has been making fuei oil supplies to
TEPL under a valid Fuel Supply Agreement (FSA) under the
Energy Policy of 1994. However, TEPL is in breach of the
provisions of the FSA as it has failed to uplift fuel oil from PSO
on a contihuous basis. TEPL is bound by the FSA under
Clause-3.1 to purchase all of its requirements of Fuel, Diesel
Oil, Greases, Lubricants and Additives" for its power plant from
PSO being the sole supplier during the term of the FSA. PSO
has already communicated its reservations regarding the
purchase of fuel by TEPL from other sources which defies the
provisions of FSA between PSO and TEPL diluting the overall
security package, which essentially comprises of the FSA,
along with the Implementation Agreement (IA) and PPA. TEPL
continues to meet its fuel oil requirements from other sources
with partial supplies to a very low proportion of their actual
consumption from PSO. You are therefore requested to direct
TEPL that it should discontinue the purchase of fuel oil from
sources other than PSO n line with FSA and the generation

Page 4 o 17
 licence should be contingent upon the extension of the FSA
corresponding to the same time period:

(c). KECF requested the Authority to conductlhold a public hearing

in the matter in Karachi because all the three parties namely
the power producer, the immediate buyer/KEL and the
consumers/affected persons reside in Karachi. The Ucense
was issued for fifteen (15) years, i.e. from August 26, 2003, to
August 25, 2018, although the plant became operational on
September 26, 1995, therefore, to operate for 23 years. The
aforesaid license was modified on November 20, 2018, and the
expiry date was extended from August 25, 2015, to June 19,
2019, on the plea tht the PFA with KEL will, expire on the
same date. KECF opposed the extension on the premise that it
is an RFO based power plant and the production of power from
RFO fuel is much costlier than from LNG/Gas. Further, it is
also consistent with the policy of GoP, which has banned
setting up of new RFO based power plants. Moreover, t is a
single cycle power plant which further adds to the cost of
electricity because of its inefficiency. RFO based power plants
are inefficient because of their higher auxiliary consumption,
are much costlier to operate because of their higher
maintenance cost and are detrimental to the environment as
compared to LNGJGas based plants. Even in the merit order of
operation, the TEFL plant does not find any favor as the bigger
and more efficient RFO plants are much ahead of this small,
highly inefficient and more expensive to operate on per MW
basis pant. If the operators of this plant still intend to run it,
then they may do so on their own by selling the power to
industrial and other bonsumers located in the adjoining area by
availing the transmission and distribution network of KEL which
is now legally allowable after the recent amendments in the

/0

Page 5 at 17
 NEPRA Act and also under the NEPRA Wheeling of Electric
Power Regulations, 2016. KECF opposed the LPM of TEPL
stating that •the same is detrimental to the interest of
consumers as well as the GoP because its costlier power is a
burden on the consumers in their tariff and on the GoP in its
subsidy to the power distributor; and

(d). KEL in its comments submitted that the existing generation

license of TEPL and the PPA shall expire on June 19, 2019.
Keeping in view the current shortfall and to cater for future
growth in power demand, in addition to the expected pipeline
of planned projects which shall come online in next few years,
the continuity of existing sources of power supply in the next
five years is an essential part of the strategy of KEL to fulfill the
increasing power demand. In this regard, KEL vide its letter
dated December 04, 20.18, has already submitted Power
Acquisition Request based on the Power Sale Proposal
received from TEPL, requesting for power acquisition for
another five (05) years for which TEPL is requird extension in
the validity of its generation licence. In view of the above, KEL
requested the Authority to consider the request of TEPL for
proposed extension in its generation license which would also
enable KEL to continue to procure power from TEFL and
ensure an adequate supply of power.

(ii). The above comments of stakehol.ders were examined and in view of

the observations of Mr. Bilvani, PSO and KECF. the Authority considered it the
appropriate seeking perspective of the licensee. Regarding the observations of Mr.
Bilvani and KECF, it was submitted that the rationale for the continued operation of
the generation facility has been extensively explained in the submitted petition for
determination of reference tariff dated December 7, 2018, in respect of additional
five (05) years term extension in the PPA with KEL; however, the same is reiterated
again. It is widely acknowledged that thermal plants are an integral part of the

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energy mix, in order to meet load variations in peak and off-peak hours. Given the
prevalent policies in respect of thermal pover generation, any new thermal power
generation facility shall need to operate using an alternative fuel (other than RFO).
Therefore, this raises the question of evaluating alternative fuel sources for thermal
power generation.

(iii). It is established that reliance on local gas is not a viable long-term

solution for thermal power generation. In this regard, it is emphasized that during
the winter months of 2018-19 there was an extreme shortage of gas and even in
this lean period the generation facility was operating at around 65% despatch level,
with reliance on local RFO. Moreover, an over-dependence of thermal power
generation on gas is a poor allocation of resources given that indigenous gas is
scarce and essential raw material for certain industrial uses. Therefore, the only
remaining viable option for power generation is either RLNG or pipeline gas from
neighboring countries. At present, there are only two LNG terminals of 600 MMCFD
each which are meeting the requirements of HaveU Bhadur Shah (1230 MW),
QATPL (1180 MW) and Baloki (1320 MW) power plants. The surplus is supplied to
certain Independent Power Producers (lPPs), such as Saif Power Limited, Halmore
Power Generation Company Limited, Orient Power Company, Rousch (Pakistan)
Power Limited on availability basis. Although two or three more LNG terminals
being pursued for development of the same are at very [nitial stages and not likely
to commence operations in the next three (3) to five (5) years.

(iv). As regards to the pipeline for import of gas from neighboring

countries, even if all feasibilities and approvals are completed, it would require
more than five (5) years for its construction and commissioning. It may be noted
that the facility is currently operating on local RFO procured from local refineries
which are competitively priced when compared with other fuel sources used in
thermal power plants (i.e. imported RFO and imported LNG) and the facility has
adequate storage capacities to store RFO for up to thirty (30) days at full load.
Moreover, whilst Mr. Bilvani and KECF have made references to a dwindling RFO
market in Pakistan, currently, there is a surplus production of local RFO. It is noted
that the recent actions of the GoP seek to export RFO in order to promote export of

• ER1

REGISTRAR )i
'WI Page 7 of 17
surplus RFO resulting from limitation of storage facilities, while the import of RFO
has been put on hold. Moreover, local refineries are being encouraged to invest in

improved hydrocracking and build additional storage facilities, however, this will

require significant time and investment. Given the relatively low export opportunities
and limited storage capacity for such fuel, the local RFO market is constrained by
the. lack of readily available off-takers of the product. The facility, therefore, is
directly benefiting local refineries by purchasing local RFO and reducing the outflow
of foreign exchange by utilizing a local fuel source.

(v). About the breach of the policy of GoP, it was stated that the company
understands that the prevalent GoP policy does not permit the establishment of
new RFO based power plants, nor the import of RFO, however, it is widely
acknowledged that in order to meet load variations in peak and off-peak hours
thermal power plants are an integral part of the energy mix. It is highlighted that the
Company is not in breach of the GoP's policy (i.e. to not establish new RFO plants)
as the policy refers to new RFO plants being developed whereas the Company is
only continuing operations of its existing facility. The continued operation of the
facility is essential in order to cater for the growing population of Karachi and the
continued demand for electricity of KEL until new projects are successfully
established and commissioned. On the question of efficiency of Single Cycle Plant,
it is highlighted that the efficiency of a "Combined Cycle Gas Turbine' (CCGT) plant
is highest in baseload operations. However: considering, the operational scenario of
the facility, the efficiency of a CCGT plant would drastically reduce due to various
limitations such as size of the plant, high ambient temperatures, load variations,
number of start-ups and ramp rate, unavailability of water around the plant site,
unavailability of gas, etc. Therefore, it is not prudent to design and decide on the
technology without giving due considerations to the ground realities. Moreover, the
Authority may consider and appreciate that the company seeks extension of the
Generation Licence granted to the facility, which was commissioned under the
policy for the generation of power 1994 and the technology of the facility was well in
line with the requirements at that time. The conversion to Combined Cycle, at this
stage, makes no economic sense as the capital cost of conversion will increase the

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Page 5 orl7
tariff and will unnecessarily burden the end consumers.

(vi). On the issue of auxiliary consumption, it was stated that the technical
norm for the auxiliary consumption of small plants of CCGT in combined cycle
thode is about wo percent (2%) whereas the auxiliary consumption of our facility,
despite being a small simple-cycle plant, is one point ninety-eight percent (1.98%).
Regarding the competitive O&M, it was clarified that under the Tariff Petition, the
O&M component has been claimed on the assumption that the operation and
maintenance of the facHity shall be carried out utilizing own resources of the
Company, instead of a turnke.y O&M service provider. In the absence of a "turnkey"
third party contractor being hired for the O&M; the claim being made by the
Company is resulting in lower costs as compared to other similar generation
facilities. Generally, the engine-based plants have relatively higher operation &
maintenance cost as compared to gas turbine-based plants. However, the overall
cost of the facility to produce power would remain relatively low (as compared to
other thermal power generation facilities) as the plant is debt-free, readily available,
and already connected to the system of KEL and fit for operation for another ten
(10) years.

(vii). About the effect on the environment, it was submitted that compliance
of the facility with environmental standards is demonstrated by the fact that the
facility has the requisite approval of the Sindh Environmental Protection Agency
(SEPA) in place. In accordance with the terms of the approval of SEPA,
Environmental Performance Monitoring" of the facility is being carrjed out by
independent consultants on a regular basis. About the multiple generating units, the
facility consists of several generating units and therefore the fuel efficiency can be
maintained across a wide range of load variations and also at part load operations,
Therefore, the facility can be operated at all loads with the same efficiency.

(viii). About the suggestion of wheeling to industrial consumers instead of

supplying to KEL, it is highlighted that KEL in its "Power Acquisition Consent
(dated October 22, 2018)' submitted that "...the continued availability of the facility
is an integral part of our strategy to meet our future demand and its contribution to

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the system stability of the 132- kV network due to its strategic location in North-
West zone of Karachi. Additionally, KEL has also submitted a power acquisition
request to the Authority vide its letter No. SBD/AR/NEPRA-0312/2018-0412, dated
December 4, 2018 (the 'Power Acquisition Request') for permission to KEL to
acquire power from the Company for the PPA Term Extension. KEL stated in the
Power Acquisition Request ".. .to ensure adequate supply of power to meet the
growing power demand of the city, in addition to the expected pipeline of planned
projects which shall come online in next few years, the continuity of the existing
sources of power supply in the next five year is an essential part of K-Electric's
strategy to fulfill the increasing power demand...".

(ix). Further, TEPL submitted that [he stakeholders may be aware that
KE.L has added new power generation facilities of more than 1000 MW since 2009
to its distribution system. KEL is also procuring power from Fauji Fertilizer Bin
Qasirn Limited, Sindh Nooriabad Power Company (Private) Limited-Phase-i &
Sindh Nooriabad Power Company (Private) Limited—Phase-2 but despite all these
additions the shortfall in the year 2017-18 was around 500 MW. Many of the
planned investments in generation projects of KEL have been delayed and KEL
anticipates a power shortfall of 600 MW in the summer of 2019. Therefore, the
suggestion that the Company should enter into wheeling arrangements in order to
provide electricity to consumers in other service territories undermines the energy
security of consumers in the service territory, of KEL.

(x). It has been suggested that KEL should procure electricity from CPPA-
G/NTDC. In this regard, it is highlighted that out of the two projects mentioned, Port

Qasim Coal project is already connected to the national grid and selling power to.
the CPPA-G/NTDC white Hubco Coal project is yet to be commissioned, however,
it would also be connected to the national grid. As the Authority may be aware, the
Cabinet Committee on Energy (CCE) was recently briefed by the Power Division
that there will be toad shedding in 2019 peak seasons. The National Power Control
Centre (NPCC) data showed that the generation deficit was at 7,000MW, on some
occasions in May 2017. According to the Energy Access Outlook 2017 of
International Energy Agenóy (lEA), twenty-five percent (25%) of Pakistani

REGISTRAR Page 10 o(17

9>
households are not connected to the national grid. In other words, over 50 million
Pakistanis may be living without access to electricity. Considering all these facts, it
is considered that CPPA-G does not have surplus power to cater to the additional
demand for electricity. KEL has also highlighted that it is critical for the facility to
continue to generate electricity, in order to provide uninterrupted supply to its
britical industrial consumers.

(xi). It has been suggested that the power purchase agreement between
KEL and the Company must be on take & pay basis and that the fuel cost of the
same should a pass through. It is submitted that the project is an IPP (as opposed
to being a captive power plant) and will exclusively supply power to KEL. All IPPs
are developed on take or pay' basis as a large investment is required by the
project company. This is essential as providing certainty of income to sellers is a
ruciaI feature for projects with very large initial capital investment. Therefore, a
"take & pay" arrangement as opposed to the "take or pay" will make the project
unviable for the sponsors. This risk allocation provides the Company with the
certainty of regular project revenues and a predictable cash-flow siream, a
necessary criterion for the Company to continue operations of the facility. The
stakeholders have failed to understand the prevailing contractual/tariff regime,
commercial realities and the fact that the "take & pay" arrangement works for
facilities that meet their fixed cost/expenses by in house consumption and sell
surplus power on "as & when" available basis. This arrangement does not provide
the requisite comfort to ensure recovery of mandatory payments associated with
capacity charge and guaranteed off-take. Moreover, the Company will sell its output
to KEL on commercial terms without allocating risk obligations on the GoP. The
Company will assume the commercial risk, without having the necessary comfort
which is typically available with grid-based power projects under the relevant
government policies, including an Implementation Agreement and sovereign
guarantee of GoP. Therefore, a "take & pay" arrangement as opposed to the "take
or pay" will make the project questionable and in the absence of assured revenue,
the project will not be viable.

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Page 11 of 17
c
 (xii). It is pertinent to highlight that unlike the complexities and, long
gestation periods invoTved in the development of a neW power generation facility,
the Project, being operational now for over two (2) decades, has all requisite
contractual arrangements and other infrastructure requirements in place to continue
power generation for servicing the consumers of the largest city of Pakistan. It is
noted that implementation of the PPA Term Extension will neither require a
financial close from lenders nor construction of any new transmission lines.
Moreover, an offlake arrangement is already in place and KEL itself is a strong
supporter of the PPA Term Extension. Given the combination of a well-maintained
and debt-free' facility with no major capital expenditures required for the continued
use of the facility, KEL's consumers will directly benefit from the low cost of
electricity supplied by the Company during the requested extension period.

(xiii). On the comments of PSO, it was submitted that the matter of

purchase of fuel from PSO has extensively been discussed between the parties.
The Company has not disputed its obligation under the FSA to purchase its
requirements for "Fuel, Diesel Oil, Greases, Lubricants and Additives" for the
facility from PSO. However, the reservation of the company in respect of the
purchase of fuel under the FSA relates to the fact that the quality of fuel supplied by
PSO under the FSA is not in conformity with the required standards for such fuel
under the terms of the FSA. Nonetheless, the contentions raised by PSO in respect
of the alleged breach of the FSA are being discussed between TEPL and PSO
bilaterally. The same does not impact the matter before the consideration of the
Authority i.e., granting the Company a necessary regulatory consent in order to
continue the activity of power generation.and meets its obligations under the PPA
with KEL. The comment of PSO that the Generation' Licence of the Company
should be contingent upon the extension of the FSA corresponding to the same
time period is unfounded given that the FSA formed part of the 'security structure'
that was available to the Company at the inception of the Project which is no longer
continuing on an 'as-is basis'. At such time, the Company also had the benefit of
the Implementation Agreement and GoP Guarantee, which shall also no longer be
part of the security structure in the PPA Term Extension.

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Page 12 of 17
 (xiv). The Authority considered the above submissions and considered it
appropriate to proceed further with the communicated LFM as stipulated in the
Licensing Regulations and the Generation Rules.

(E). Analysis of the Authority

(i). The Authority has examined the entire case in detail including the
already granted generation licence, communicated LPM, comments of the
stakeholder, provisions of PPA, and relevant rules & regulations.

(ii). In this regard, it is observed that in terms of Regulation-1O(5) of the

Licensing Regulations, the Authority is entitled to modify a licence subject to and in
accordance with such further changes as the Authority may deem fit if, in the
opinion of the Authority such modification (a). does not adversely affect the
performance by the licensee of its obligations; (b). does not cause the Authority to
act or acquiesce. in any act or omission of the licensee in a manner contrary to the
provisions of the NEPRA Act or the rules or regulations made pursuant to it; (c). is
or is likely to be beneficial to the consumers; (d). is reasonably necessary for the
licensee to effectively and efficiently perform its obligations under the licence; and
(e). is reasonably necessary to ensure the continuous, safe and reliable supply of
electric power to the consumers keeping in view the financial and technical viability
of the licensee.

(iii). The Authority has observed that the LPM envisages extension in the
term of the generation licence. In this regard, Rule-5 (2) of the Generation Rules
stipulates that on the expiry of the term of a generation licence, the Authority may
renew a generation licence for such further term as it may deem appropriate.
However, in consideration of the said, the Authority will consider (a). the remaining
maximum expected useful life of the units comprised in the generation facility; (b).
the performance of the licensee during the then expiring term; and (c). the interests
of the consumers and the electric power industry as a whole.

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I Page 13 of 17
• (iv). The Authority has examined the submitted LPM in terms of the criteria
given in the relevant regulations and it is found that the average running of each
Diesel Engine of the generation facility is around 127560 hours with the operatibn
of the lowest used engine at 118837 hours and that of the engine having maximum
use at 141826 hours. In view of the said, the average usage of the generation
facility in terms of the years comes out to be around, fifteen (15) years. If the
benchmark followed by the Authority for similar power plants is considered, then
the remaining useful life of the TEPL is at-least ten (10) years. The said
assessment is also corroborated by the plant' assessment report prepared by an
Independent Malaysian Consultant namely Continental Marine Energy which has
concluded that the expected useful of the generation facility is ten (10) years.

(v). The Authority observes that the performance of the licensee during
the previous term has been very satisfactory as has also been confirmed by the
Power Purchaser i.e. KEL and' the same can be gauged from the fact that a new
PAR has already been submitted for consideration of the Authority. In this regard, it
is pertinent to mention that due to current supply-demand situation in the service
area of KEL, allowing extension in the term of licence is vital as it will maintain a
steady supply to the area which cannot be supplied by any suitable alternate
source and accordingly it is in the interests of the consumers and the electric power
industry as a whole to allow an extension in the term of the licence of TEPL. It is
important to highlight that KEL had submitted its consent for Purchase of Power
from the generation facility for another five (5) years subject to Regulatory
approvals.

(vi). The Authority has also considered the comments of the stakeholders
and observed that all the stakeholders except KEL opposed the requested
extension in the term of the Licence of TEPL, inter-a/ia, on the ground that plant is
low in efficiency and producing costly energy. The stakeholders submitted that
many new efficient plants have been added in the national grid which are currently
underutilized, therefore, in the overall interest of the country, the equivalent power
can easily be provided to KEL by the national grid. In addition, PSO has also raised
concerns regarding its FSA with the TEPL.

W REGISTRAR )

'4 Page 14 of 17
 (vii). Regarding the comments of PSO, the Authority observes that since
RFO is an uhregulated commodity, therefore, it cannot direct TEPL to purchase the
same from a specific supplier. In this regard, TEPL should have the option to
purchase the fuel from any supplier given market-based price competitiveness and
required quality standards. Further, the Authority is of the considered opinion that
the matter related to FSA is a bilateral issue between PSO and TEPL and does not
come under its regulatory domain and therefore the same may be reolved
bilaterally or through other available avenues. 1-lowever, the Authority considers it
appropriate to direct TEPL to maintain adequate storage of fuel supplies during the
term of its licence to meet its obligations towards the Power Purchaser as agreed in
the PPA.

(viii). In view of the comments of the stakehdlders regarding supply of

additional power from the national grid to KEL, the Authority vide letter No.
NEPRA/SAT-lI/TRF-460110195-10496 dated June 18, 2019, through the Ministry of
Energy, directed CPPA-G to look into the matter of supply of equivalent power to
KEL as this will reduce the burden of capacity charges and will be beneficial for all
the electricity consumers in the country. CPPA-G in its response vide letter No.
CPPA-G/2019/0E017307-11 dated June 19, 2019, committed that the analysis and
recommendation in this regard will be submitted to the Authority after consultation
with NTDC and KEL. Till that time, CPPA-G suggested that procurement of power
from TEPL may be allowed on the take & pay basis and shall be dispatched on the
basis of KEL's merit order without any sovereign guarantees. commitment by the
GoP. The Authority vide its letter No. NEPRA/SAT-IIITRF-460/TEPL-2018/18005
dated September 30, 2019, again directed to submit its analysis and
recommendations on the additional supply of power to KEL to replace power supply
by TEPL. Further, the Authority vide its letter No. NEPRNSAT-IIITRF-450/NTDC-
2018/1 8593 dated October 4, 2019, also directed NTDC to provide information
whether equivalent power can be made available to KEL from national grid to
replace the power supplied by TEPL without any transmission constraints and in
case NTDC system allows uninterrupted transmission of additional power, how
much time will it take to make necessary arrangements? In this regard, NTDC vide

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its letter No. GMT/NTDCr1-90/1 875-78 dated November. 1, 2019, informed that the.
existing NTDC and KEL 220 kV transmission interface cannot support 250 MW
export in addition to the existing 650 MW export to KEL in a reliable manner,
especially, under N-i contingency conditions. NTDC further submitted that in the
current scenario to cater the demand and maintain the smooth running of system,
KEL may operate the two lPPs ("Tapat and GuI Ahmad") as Marchant lPPs on
Take & Pay basis for 2-3 years. till the up-gradation of KEL network, to take
additional power through existing NTDC system interface.

(ix). In consideration of the. above, the Authority considers that the supply
of additional power to KEL from the national grid will not be possible at least in the
short term. Therefore, keeping in view the demand-supply situation in the service
area of KEL and the remaining useful life of the generation facility, the Authority
considers it appropriate to extend the term of the generation licence of TEPL to ten
(10) years, i.e., till June 19, 2029. However, TEPL will be required to strictly follow
the directions given by the Authority in the tariff determination regarding supply of
power to KEL. Further, the Authority considers that in order to promote competition
in the market, TEP.L may opt to supply to Bulk Power Consumers in its vicinity
during or after the expiryof the extended term of the PPA subject to regulatory
approvals.

(x). Further to the above, the Authority considers that the LPM in the
generation licence of TEPL regarding extension in the useful life of the generation
facility will not be affecting adversely the performance by the Licensee of its
obligations but will enable the Licensee to supply to the utility. Further, the Authority.
also observes that the LPM has not caused the Authority to act or acquiesce in any
act or omission of the licensee in a manner contrary to the provisions of the NEPRA
Act or the rules or regulations made pursuant to it. The proposed LPM will be
beneficial to the consumers of KEL which will face severe power supply and
reliability issues if extension in the term of the licence is denied. It is observed that
LPM is reasonably necessary for the licensee to effectively and efficiently perform
its obligations under the licence. Further, it is reasonably necessary for the

Pagø 16 of 17
Licensee to have thi LPM to ensure continuous, safe and reliable supply of electric
power to the utility/corsumers keeping in view its financial and technical viability.

(F). Approval of LPM

(I). In consideration of the above, the Authority hereby approves the
communicated LPM of TEPL in terms of Regulation-10(11)(a) of the Licensing
Regulations and extends the term of the generation licence (No. IPGL/010/2003.
dated August 26, 2003) of TEPL till June 19, 2029.

(ii). Accordingly, the generation licence (No. IPGL/010/2003, dated

August 26, 2003) in the name of TEPL is hereby modified. The changes in 'Face
Sheet", of the generation licence are attached as an annexure to this
determination. The approval of LPT'4 will be subject to the provisions contained in
the NEPRA Act, relevant Rules & Regulations framed thereunder, terms &
conditions of the generation licence and other applicable documents.

Authority:

Engr. Rafique Ahmed Shaikh

(Member)

Engr. Rehmatullah Baloch

(Member)

Saif Ullah Chattha

(Member)

Engr. Bahadur Shah

(Member/Vice-Chairman)

Engr. Tauseef H. Farooqi

(Chairman)

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Page 17 o 17

JEPR*V
 National Electric Power Regulatory AUthority
(NEPRA)

lslarnabád— Pakistan

L Generation Licence
IPGL/O1O/2003
[ I
In exercise of the Powers conferred upon the National Electric; Power

Regulatory Authority (NEPRA) under Section-26 of the Regulation of

Generation, Transmission and Distribution of Electric Power Act, 1997, (XL of

1997), as amended or replaced from t! -e o 1ire, the Ajtbority hereby

modifies the term of the Generation Licence (No IPGL/010/2003, dated August

26, 2003 and Modification-I dated November 20, 2018) granted to Tapal Energy

(Private) Limited The changes made in the Generation Licence are described in

the attached Annexure-A

This Modification-Il is given under my hand on

 Generation. Licence
lapel Energy Private) Limited
Doh Gondpass, Tapo Gabopat
Huh River Road, Taluka & Diatrici Karachi
in the Province of Sindh

An nexu re-A

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Page 1 of 2
Modiflcation-Il

I
 Generation Licence
Tapal Energy (Private) Limited
Deh Gondpass, Tapo Gabopat
Huh River Road, Tatuka & District Karachi
in the Pravinc o1Sinh

Modification-Il in the
Generation Licence (No. tPGLI010/2003 dated
Auqust 26, 2003) of Ta pal Energy (Private) Limited

(A). Face Sheet

On the Face Sheet (i.e. the first page of the generation licence read
with Modification-I dated November 20, 2018), in the last line the
phrase "expires on 191h day of June, Two Thousand & Nineteen' is
deleted and is replaced by the phrase 'expires on 1gttj day of June,
Two Thousand & Twenty Nine."

(B). Article-4

(i). Article-4(1) of the generation licence is rephrased as "the term of

this Licence is valid upto June 19, 2029."

\-- v —
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Page 2 of 2
Modification-il
 ANNEXURE H
REFERENCE GENERATION TARIFF TABLE

58
 Energy Charge (EC) Capacity Charge (CC)

(Rs ./kWh) (Rs./kWh) Total Tariff

Dispatch Total
Year Cost of
Factor Fuel Variable Fixed CC
Total Working 'insurance ROE
Component O&M O&M
Capital Rs./kWh Rs./kWh
a b c a+b d e f g h - d+e+f+g

1 30.38% 21.3745 1.1275 22.5020 1.4024 0.8363 0.4314 1.3627 4.0328 26.5348
2 29.58% 21.3745 1.1267 22.5012 1.4361 0.8565 0.4419 1.3955 4.1300 26.6312