NPGCL

Northern Power Generation Company Limited owns and operates thermal power generation facilities located at Muzaffargarh, Multan, Faisalabad and Nandipur. A complex pattern of internal and external factors constrain operating and financial performance of the company. The company has been operating with a negative bottom line, which has jeopardized sustainability. Government of Pakistan aims to address the country’s power sector issues by implementing Power Sector Reform Program.

Ownership

The company is wholly owned by the Government. Since the incorporation of the company in 1998 after unbundling of WAPDA, PEPCO has been managing financial, human resource and procurement matters of the company. PEPCO is likely to be wound up by the 3rd quarter of 2011 that may lead to full corporate autonomy of the company within public sector.

Vision

“Generation of Electric Power dependably and efficiently without compromising on environment standards”

Mission

“To emerge as the most reliable and economical public sector generation company operating with optimal efficiency, observing strict emission controls and catering for wellbeing of public in general and its work force in particular.”

External Environment

Present market composition, size and structure as well as the regulatory regime have been assessed with an assessment of likely market trends in short and medium term to map strategic positioning of the company. Pakistan power sector is under severe demand pressure and is likely to remain so until a foreseeable future. Thermal power is more expensive as compared to hydro power. Gas is a cheaper fuel for power generation in Pakistan but gas reserves are depleting and new discoveries are not on the horizon. Furnace oil is more expensive and exposed to price volatility. Increased dependence of power sector on furnace oil in the recent years has impacted electricity price in the country. However, until power mix shifts back in favor of hydro power and new gas discoveries are made, oil fired plants are expected to remain in full possible production, constrained only by affordability factors. Any expansion in oil fired capacity is therefore not likely to be a right direction.

Future Opportunity

Demand and supply situation, fuel prices and availability constraints and internal weaknesses of the company limit the choices available for expansion. Replacement of gas fired capacity with more efficient plants after dependable allocation of gas quota is one of the few opportunities for expansion for the company.