ISLAMABAD - Oil and Gas Development Company Limited (OGDCL) will issue Term Finance Certificates (TFCs) worth Rs 70b in an apparent bid to assist the cash-starved PPP-led govt to resolve the soaring circular debt issue of power sector of the country. Sources in ministry of water and power disclosed to TheNation that high-ups in both the Power Ministry and the Petroleum Ministry held a meeting with President Asif Ali Zardari to discuss the issues of the worsening energy crisis. During the course of this meeting, President Zardari, while giving his verbal approval over the proposal of the Ministry of Petroleum and Natural Resources, further directed the the Water and Power Ministry to table a summary before the ECC of the cabinet to get its final nod in a bid to adjust the growing circular debt issue of the power sector.
They also told that these Term Finance Certificates (TFCs) paper would be provided to the central power-purchasing agency (CPPA), and the CPPA in return will provide the then Karachi Inter-bank offered Rates (Kibor) plus 0.5per cent to OGDCL. They said the Finance Ministry would offer govt guarantee to OGDCL against the loan to be provided to CPPA, adding that OGDCL will utilise Rs70b to be earned through TFCs along with the expected earning of Rs5.12b under the head mark-up