PF Archive

Low fat spread

01 11 2001

Since its de-merger from National Power in October 2000, International Power has stuck to its strategy of growth in the US, Europe and the Middle East and Australia, claiming that the geographical spread of its operations will protect it from any market downturn. ?The international spread of our operations mitigates our exposure to the business cycles of any single market and provides a strong platform for sustained growth in shareholder value,? declared chairman Sir Neville Simms in the company's interim results, published in September this year. Let's hope he's right ? as any company sitting on top of two power plants in Pakistan needs all the geographical diversity it can get. To be fair, International Power's two Pakistan-based plants may be about to pay the company a dividend for the first time in three years. International Power has a 26% stake in the Hub River project (run by Hubco), the 1,292MW residual fuel oil-fired plant 45km outside Karachi, and a 36% stake in Kot Addu, a 1,600MW CCGT plant located in the Punjab region of the country. Hubco, which is the largest IPP in Pakistan, announced at the end of October that it will hold a board meeting this month (November) to approve its full-year results which will entail payment of a 1.70 rupee per share dividend. Both plants have long-term PPAs with the Water and Power Development Agency (WAPDA) and it is the settling of a bitter tariff dispute with WAPDA last December that has made this dividend payment possible. The dispute was settled by Hubco agreeing to reduce its tariffs from 6.5 cents per kw/hr to 5.6 cents per kw/hr. ...