Service Provider
Agreement

Service Provider Agreement

Table of Contents
ARTICLE-I - DEFINITIONS AND INTERPRETATION .................................................3
1. DEFINITIONS...........................................................................................................32.

INTERPRETATION...............................................................................................43.

INCONSISTENCIES..............................................................................................4

ARTICLE-II - COMPLIANCE, SCOPE AND EXTENT OF THIS AGREEMENT ..........5
1.

COMPLIANCE WITH THE MARKET COMMERCIAL CODE .........................52.

SCOPE ...................................................................................................................7

3.

COMMENCEMENT AND TERM .........................................................................84.

TERMINATION ....................................................................................................8

ARTICLE-III - REPRESENTATIONS AND WARRANTIES ...........................................8
1.

REPRESENTATIONS AND WARRANTIES OF MARKET OPERATOR ...........82.

REPRESENTATIONS AND WARRANTIES OF THE APPLICANT ...................8

ARTICLE-IV – MISCELLENEOUS ..................................................................................91.

DISPUTE RESOLUTION ......................................................................................92.

LIABILITY AND INDEMNIFICATION ............................................................. 10

3.

DATA PRIVACY ................................................................................................. 11

4.

CONFIDENTIALITY .......................................................................................... 115.

APPLICABLE LAWS .......................................................................................... 116.

AMMENDMENT TO THIS AGREEMENT ........................................................ 128.

DOCUMENTS AND INFORMATION ................................................................ 129.

WAIVERS ............................................................................................................ 12

10.

NOTICES ...................................................................................................... 12Page | 1

This Service Provider Agreement (hereinafter called this “Agreement”) is made on this---------- day of ------------- 2023;1
BY AND BETWEEN:

1. The Central Power Purchasing Agency (Guarantee) Limited (hereinafter called
the “Market Operator”, which expression shall include its successors in interest
and assigns) (having Market Operator License No. M0L10112022), a company
having its principal offices at Shaheen Plaza, Plot No. 73-West, Fazl-e-Haq
Road, Blue Area, Islamabad, Pakistan, incorporated under the Companies Act,2017 (Corporate Universal Identification No.0068608);AND2.

, a company having its principal office at_____________________________ in Pakistan, incorporated under theCompanies Act, 2017, (hereinafter called the “[Distribution Service Provider(DSP), Transmission Service Provider (TSP) or Metering Service Provider(MSP)]”, which expression shall include its successors in interest and permitted
assigns);

Each of the parties shall be referred to individually as a “Party” and collectively as“Parties”.
RECITALS:
WHEREAS M/s ___________ wishes to provide services in the Market organized andadministered by the Market Operator;
WHEREAS M/s____________ has submitted an Admission Application for enrolment
as a Service Provider to the Market Operator which is under process, and as a condition
precedent for enrolment under the Market Commercial Code the Service Provider
Agreement shall be executed;
WHEREAS the Market Commercial Code will have the effect of a contract between theMarket Operator and the Applicant by virtue of the execution of this Service Provider
Agreement;
WHEREAS M/s ___________ is registered with the FBR for GST and Income Tax andappearing in the Active Taxpayer List and has acquired all the relevant
licenses/concurrence/registration/approvals from the Authority and any other relevant
entity as required under the law;
WHEREAS the Applicant and the Market Operator wish to execute this Agreement inpart to satisfy the conditions contained in the Market Commercial Code that a service
provider agreement be executed prior to the Applicant’s enrolment as a Service Provider
by the Market Operator;
1 This is a generic draft Agreement. Minor adjustments will be made at the time of execution with the relevant

Applicant.
Page | 2

NOW THEREFORE, in consideration of the mutual covenants contained herein and ofother good and valuable consideration, the receipt and adequacy thereof is hereby
acknowledged, the Parties agree as follows:
ARTICLE-I - DEFINITIONS AND INTERPRETATION
1.

DEFINITIONS(a) When applying the provisions contained in this Agreement, and unless otherwise
specified or the context otherwise requires, the following words and expressions shallhave the meaning:i.

"Act" means the Regulation of Generation, Transmission and Distribution ofElectric Power Act, 1997 as amended from time to time;ii.

“Admission Application” means the document which an Applicant is required
to submit when applying for enrolment with the Market Operator, in the form set
forth in the applicable Market Commercial Code Operational Procedure or suchother form as the Market Operator may from time to time determine;iii.

“Applicable Law” means the laws of Pakistan including federal, provincial, andlocal laws;

iv.

“Applicant” means any person who has initiated the application process to enrol
with the Market Operator in accordance with the provisions of Market
Commercial Code;v.

“Authority” means the National Electric Power Regulatory Authority establishedunder section 3 of the Act;

vi.

“Clause” means a clause of this Agreement;vii.

“Confidential Information” shall have the same meaning as assigned to the termin the Market Commercial Code;

viii.

“Codes” means any code approved by the Authority under the Act;

ix.

“Market Commercial Code” or “Commercial Code” means a code preparedand maintained by the Market Operator and approved by the Authority pursuant
to section 23B of the Act and shall also include its operational procedures;x.

“Effective Date” means the commercial market operations date of the Market;

xi.

“GOP” means the Government of the Islamic Republic of Pakistan;xii.

“Grid Code” means the grid code prepared and maintained by the System
Operator pursuant to sections 23G and 23H of the Act and approved by the
Authority or till the time the same is approved by the Authority, the Grid Code2005;

Page | 3

xiii.

“Market” means the Competitive Trading Bilateral Contract Market (CTBCM)
of Pakistan organized for wholesale buying and selling of energy and / or capacity
mainly through bilateral contracts;

xiv.

"Market Operator" or “MO” means a person licensed by the Authority under
section 23A of the Act;

xv.

“Service Provider” means any person who is enrolled with the Market Operator
and has also executed a Service Provider Agreement;

xvi.

“System Operator” means a person licensed by the Authority under section 23Gof the Act;

xvii.

“Termination Date” means the date on which Applicant’s application to cancel
its enrolment as Service Provider is approved or the date on which enrolment of aService Provider is terminated by the Market Operator under the provisions of theMarket Commercial Code; andxviii.

“Termination Order” means an order issued by the Market Operator pursuant to
the relevant provisions of the Market Commercial Code.

(b) Words and expressions used but not defined in this Agreement shall have the same
meanings as assigned to them in the Market Commercial Code.

2. INTERPRETATIONIn this Agreement unless the context otherwise specifies or requires:
a. Capitalized words used shall have the meanings assigned to them in the definitionsof this Agreement and the Market Commercial Code;b. references to the masculine include the feminine and references to the singularinclude plural;c. PKR means Pakistani Rupees;d. the word “include” shall be construed without limitation;e. a reference to a “person” includes any individual, partnership, firm, company,
corporation (statutory or otherwise), joint venture, trust, association, organization,or other entity, in each case whether having separate legal personality;
f. a reference to law or the Act shall be construed to include any amendment,
modification, extension, re-enactment, or replacement thereof; andg. a derivative term of any defined or interpreted term or expression shall be
construed in accordance with the relevant definition or interpretation.

3. INCONSISTENCIESIn the event of any inconsistency between this Agreement and the Market Commercial
Code or the Grid Code, the provisions of the Market Commercial Code or the Grid Code,as applicable, shall prevail to the extent of such inconsistency.
Page | 4

ARTICLE II - COMPLIANCE, SCOPE AND EXTENT OF THIS AGREEMENT
1. COMPLIANCE WITH THE MARKET COMMERCIAL CODE
a. The Applicant hereby agrees to be bound by and to comply with all of theprovisions of the Market Commercial Code and its operational procedures so far
as they are applicable to the Applicant, including once it has been enrolled by theMarket Operator as a Service Provider.
b. The Market Operator hereby agrees to be bound by and to comply with all theprovisions of the Market Commercial Code and its operational procedures so far
as they are applicable to the Market Operator.
c. The Applicant acknowledges and agrees that the Market Commercial Code may
be amended from time to time in accordance with the procedure specified in theMarket Commercial Code and that any such amendment shall be applicable upon
the Applicant as a Service Provider from the date of coming into force of such
amendment.
d. The Applicant hereby acknowledges and confirms that it shall promptly, within
the time limits specified by the Market Operator, disconnect any Market
Participant against which a disconnection request was issued by the Market
Operator and failing which it shall be responsible for all of the financial
obligations of such Market Participant, to the extent that such financial obligations
are attributable to the Applicant’s failure to comply with the disconnection request
issued by the Market Operator;2Metering Services
e. The Applicant as a Metering Service Provider hereby, inter alia, also
acknowledges and confirms that:3
i.

it shall provide all the information regarding metering data of all Metering
and/or Trading Points to the Market Operator in accordance with the Market
Commercial Code and its operational procedures;ii.

it shall calculate the hourly network transmission losses as applicable fromtime to time and provide the same to the Market Operator;iii.

it shall submit all Metering Incident Reports to the Market Operator on
timely basis in accordance with the Market Commercial Code and its
operational procedures;iv.

it shall timely submit all relevant information regarding addition of any new
Metering and/or Trading Points to the Market Operator as per the provisionsof the Market Commercial Code and its operational procedures;v.

if applicable, it shall issue certification of historical data of a prospective
Market Participant regarding its maximum value of demand during systempeak hours, when approached by such prospective Market Participant;2 Only applicable for TSP and DSP
3 Only will be added in the SPA of MSP

Page | 5vi.

it has entered or shall enter into all required agreements with the Market
Participants or prospective Market Participants and other service providers
for the provision of all aspects of the metering services provided or to beprovided by the Applicant, and that the metering data provided by the
Applicant to the Market Operator shall be the conclusive basis for theMarket Operator to execute the settlement as provided for in the Market
Commercial Code and its operational procedures;vii.

it shall be solely responsible for collecting any and all fees from therespective Market Participants and Service Providers in relation to its
provision of metering services thereto, and shall raise no such claim against
the Market Operator;viii.

it shall be solely responsible for performing the meter reading at eachMetering and Trading Point, and shall also perform the validity checks ofthe metered values, and transfer the information thereof to the Market
Operator for settlement purposes;ix.

it shall timely resolve any issue / disputes related to the metering data withany Market Participant or Service Provider as per the procedures stipulated
in their respective agreements and other applicable documents and theMarket Operator shall not be involved in any such dispute; andx.

it shall submit a certificate to the Market Operator to the effect that theCommercial Metering System installed at all the Metering and/or Trading
Points complies with the requirements of the Market Commercial Code,Grid Code, and other applicable documents. In addition to the aforesaid, it
shall also organize and keep complete and accurate record containing all theinformation regarding the installation, commissioning, and testing of theCommercial Metering System.

Transmission Network Operator Services
f. The Applicant as a Transmission Service Provider hereby, inter alia, also
acknowledges and confirms that:4
Interconnectioni.

it has entered or shall enter into all required agreements with the Market
Participants or prospective Market Participants and other Service
Providers for the provision of all aspects of the transmission and related
services provided or to be provided by the Applicant;ii.

it has entered or shall enter in all required agreements with all relevantMarket Participants regarding the treatment of the quantum and financial
implication for losses in its network;iii.

it shall be solely responsible for collecting any and all fees from therespective Market Participants and Service Providers in relation to its
provision of transmission and related services thereto, and shall raise nosuch claim against the Market Operator;

4 Only for agreement of TSP

Page | 6

iv.

it shall be liable to settle the obligations regarding any excess losses
arrived at on the basis of difference between the actual losses calculatedby the MSP and the reference transmission losses determined by the
Authority;g. The Applicant (Distribution Service Provider) hereby, inter alia, also
acknowledges and confirms that:5
Interconnectioni.

it has entered or shall enter into all required agreements with the Market
Participants or prospective Market Participants and other Service Providers
for the provision of all aspects of the transmission, distribution and related
services provided or to be provided by the Applicant;ii.

it has entered or shall enter into all required agreements with all relevantMarket Participants regarding the treatment of the quantum and financial
implication for losses in its network;iii.

it shall be solely responsible for collecting any and all fees from therespective Market Participants and Service Providers in relation to its
provision of transmission, distribution and related services thereto, and shallraise no such claim against the Market Operator;iv.

it shall verify and certify the data provided by a BPC to the Market Operator
about the maximum value of its demand during system peak hours as per
the procedure set forth in the Market Commercial Code;Others6v.

it shall submit to the Market Operator in a timely manner the information
stipulated in the Market Commercial Code or as may be required by theMarket Operator in accordance with the Market Commercial Code;7vi.

it shall inform the Market Operator of any material change related to its
business and to the information included in its Admission Application; andvii.

the applicant confirms that it may be subject to an enforcement action inaccordance with the Market Commercial Code for failure to comply withthe provisions of Market Commercial Code;

2. SCOPE
After the execution of this Agreement and thereafter with effect from the date ofenrolment of the Applicant by the Market Operator and until the termination of thisAgreement, the Applicant shall be granted the status of a Service Provider for the
purposes of the Market Commercial Code and shall have the obligation to provide
services as stipulated in this Agreement, its License/registration, and the relevant
provisions of the Act and rules and regulations made thereunder and the Codes approvedby the Authority from time to time.
5 This will be only for a Distribution Company.
6 This section will apply on all i.e. MSP, TNO, DISCO.
7 Clauses under Others for both TNO and MSP and DSP.

Page | 7

3. COMMENCEMENT AND TERM
This Agreement shall come into force and become effective on the Effective Date hereofand shall remain in full force and effect until terminated in accordance with clause 4 of
Article II of this Agreement.
4. TERMINATION
a. After the enrolment of the Applicant as a Service Provider by the Market
Operator, this Agreement shall automatically terminate on the earlier of:i.

the date of suspension, revocation or cancellation of license orregistration of the Applicant by the Authority in accordance with the Act
or rules and regulations made thereunder; orii.

the date on which the withdrawal of the Applicant is approved by theMarket Operator, in accordance with the withdrawal provisions stipulated
in the Market Commercial Code.

b. Notwithstanding Clause (a) above, the Applicant shall remain subject to and liable
for all of its obligations and liabilities as a Service Provider which were incurredor arose under the Commercial Code prior to the date referred to in Clause (a) (i)or (a) (ii) above, regardless of the date on which any claim relating thereto may
be made.
c. Notwithstanding any other provision of this Agreement and, for greater certainty,
the provisions of Clause (b) above shall survive the termination of this Agreement
without limit as to time.
ARTICLE-III - REPRESENTATIONS AND WARRANTIES
1. REPRESENTATIONS AND WARRANTIES OF THE MARKET OPERATORThe Market Operator hereby represents and warrants as follows to the Applicant, andacknowledges and confirms that the Applicant is relying on such representations andwarranties in applying to become enrolled as a Service Provider:a. the execution, delivery and performance of this Agreement by it has been duly
authorized by all necessary corporate and / or governmental approvals; andb. this Agreement constitutes a legal and binding obligation on the Market Operator,
enforceable against the Market Operator in accordance with its terms.
2. REPRESENTATIONS AND WARRANTIES OF THE APPLICANT
The Applicant hereby represents and warrants as follows to the Market Operator andacknowledges and confirms that the Market Operator is relying on such representations
and warranties without independent inquiry (save and except for any testing or inspectionthat the Market Operator may have participated in) (i) to ascertain whether the Applicant
satisfies the requirements for enrolment as a Service Provider; and (ii) to enroll the
Page | 8

Applicant as a Service Provider under the Market Commercial Code for providing
services in the market:
a. it has all the necessary corporate powers to enter into and perform its obligations
under this Agreement;b. the execution, delivery and performance of this Agreement by it has been duly
authorized by all necessary corporate and / or governmental entities and in the
Applicant’s good faith belief and after making reasonable inquiries does not result ina violation or a breach of or a default under or give rise to a right of termination,
greater rights or increased costs, amendment or cancellation or the acceleration of any
obligation under (i) any legal instruments of the Applicant; (ii) any contracts or
instruments to which the Applicant is a party or by which the Applicant is bound; or(iii) any laws applicable to it;c. the individual(s) executing this Agreement, and any document in connection
herewith, on behalf of the Applicant have been duly authorized to execute thisAgreement and have the full power and authority to bind the Applicant;d. this Agreement constitutes a legal and binding obligation on the Applicant,enforceable against the Applicant in accordance with its terms;
e. except for its enrolment as a Service Provider, it holds all permits, licenses and otherauthorizations that may be necessary to enable it to carry on the business and performthe functions and obligations of a Service Provider as described in the Market
Commercial Code and in this Agreement;
f. the information provided in support of its application for enrolment as a Service
Provider, is true, accurate and complete in all respects;
g. the Applicant has or will have prior to the first date that the Applicant participates in
the CTBCM, adequate qualified employees and other personnel and organizationaland other arrangements that are sufficient to enable it to perform all of the functions
and obligations applicable to Service providers.
ARTICLE-IV – MISCELLANEOUS
1. DISPUTE RESOLUTION
a. All disputes between the Parties shall be resolved as per the dispute resolution
mechanism stipulated in the Market Commercial Code.
b. Each Party agrees not to institute an action involving any matter arising from orin connection with such dispute before the courts or other quasi-judicial bodies
without resorting first to the dispute resolution process provided under thisAgreement and Chapter 14 of the Market Commercial Code.
c. The courts at Islamabad shall have exclusive jurisdiction regarding any disputearising under this Agreement or the Market Commercial Code.

Page | 9

2. LIABILITY AND INDEMNIFICATION
Market Operator
a. Except as may be specifically provided to the contrary elsewhere in thisAgreement, the Market Operator shall not be liable for any claims, losses, costs,
liabilities, obligations, actions, judgements, suits, expenses, disbursements or
damages of the Applicant whatsoever, howsoever arising and whether as claims
in contract, claims in tort or otherwise, arising out of any act or omission of theMarket Operator in the exercise or performance or the intended exercise or
performance thereby of any power or obligation under this Agreement or theMarket Commercial Code.
b. Subject to the above Clause (a), the Market Operator shall indemnify and holdharmless the Applicant and the Applicant’s Directors, officers and employees
from any and all claims, losses, liabilities, obligations, actions, judgements, suits,
costs, expenses, disbursements and damages incurred, suffered, sustained or
required to be paid, directly or indirectly, by, or sought to be imposed upon, theApplicant or its directors, officers or employees to the extent that such claims,
losses, liabilities, actions, judgements, suits, costs, expenses, disbursements or
damages arise out of any willful misconduct by or any act or omission that
constitutes gross negligence of the Market Operator in the exercise or
performance or the intended exercise or performance of any power or obligation
under the Market Commercial Code or this Agreement.
c. For the purposes of Clauses (a) and (b) above, an act or omission of the Market
Operator effected in compliance with the Market Commercial Code or thisAgreement shall be deemed not to constitute willful misconduct or grossnegligence. Further, the Market Operator shall not be liable in respect of any
indirect or consequential loss or incidental or special damages including, but notlimited to, punitive damages; or any loss of profit, loss of contract, loss ofopportunity or loss of goodwill. The Applicant shall have a duty to mitigate
damages, losses, liabilities, expenses or costs relating to any claims forindemnification that may be made by the Applicant.
Applicanta. The Applicant shall not be liable for any claims, losses, costs, liabilities,
obligations, actions, judgements, suits, expenses, disbursements or damages of theMarket Operator whatsoever, howsoever arising and whether as claims incontract, claims in tort or otherwise, arising out of any act or omission of the
Applicant in the exercise or performance or the intended exercise or performanceof any power or obligation under the Market Commercial Code or this Agreement.
b. Subject to Clause (a) above, the Applicant shall indemnify and hold harmless theMarket Operator, the Market Operator’s directors, officers and employees fromany and all claims, losses, liabilities, obligations, actions, judgements, suits, costs,
expenses, disbursements and damages incurred, suffered, sustained or required tobe paid, directly or indirectly, by, or sought to be imposed upon, the Market
Operator, its directors, officers or employees to the extent that such claims, losses,
liabilities, actions, judgements, suits, costs, expenses, disbursements or damages
Page | 10

arise out of any willful misconduct by or any negligent act or omission of the
Applicant in the exercise or performance or the intended exercise or performanceof any power or obligation under the Market Commercial Code or this Agreementc. For the purposes of Clauses (a) and (b) above, an act or omission of the Applicant
effected in compliance with the Commercial Code or this Agreement be deemed
not to constitute willful misconduct or a negligent act or omission. Further, theService Provider shall not be held liable in respect of any indirect or consequential
loss or incidental or special damages including, but not limited to, punitive
damages, or any loss of profit, loss of contract, loss of opportunity or loss of
goodwill.

3. DATA PRIVACY
a. Each Party acknowledges and agrees that, while performing their respective
obligations and exercising their respective rights under this Agreement, it may
receive or have access to personal or Confidential Information of the other Party,
directors, officers, employees, governance committee members and / orauthorized representatives;b. Each Party represents and warrants that its collection, access, use, storage,
disposal, and disclosure of any personal or Confidential Information shall always
comply with the Applicable Law.
4. CONFIDENTIALITY
a. All Confidential Information, including any concepts and related documentation
and all other information and materials provided by each Party in relation to thisAgreement shall always remain the sole property of said Party.
b. Each Party shall take all reasonable precautions to protect Confidential
Information, but no less than in the same manner as it treats its own confidential
and proprietary information.
c. Each Party shall, at its own expense and without need of notice, deliver to theother Party within ten (10) days following the termination or expiration of thisAgreement, all documents, and all other materials, in whatever form, containing
or reflecting any Confidential Information, together with any copies thereof. Each
Party shall, upon the request of the other Party destroy such Confidential
Information and provide the other Party with a sworn statement attesting to such
destruction. Each Party acknowledges that neither the return of any Confidential
Information nor the destruction of the same will release the other Party from its
obligations under this Agreement.
5. APPLICABLE LAWS
This Agreement shall be governed by and construed in accordance with the laws ofPakistan.
Page | 11

6. AMENDMENT TO THIS AGREEMENT
No amendment to this Agreement shall be effective unless it is made in writing by mutual
consent and signed by both Parties.
7. SUCCESSORS, ASSIGNS AND NOVATIONThis Agreement shall enure to the benefit of, and be binding on, the Parties and theirrespective heirs, administrators, executors, successors and permitted assigns. It is
expressly agreed by the Applicant that in future if a company other than present signatory
is incorporated and the Market Operator license is assigned / transferred to such company,
the Applicant shall be bound to execute a novation agreement with that new company.
8. DOCUMENTS AND INFORMATION
Each Party shall promptly execute and deliver or cause to be executed and delivered all
documents in connection with this Agreement that the other Party may reasonably require
for the purposes of giving effect to this Agreement.
9. WAIVERS
Any waiver of any default, breach or non-compliance of or under this Agreement shallnot be effective unless mutually agreed upon in writing by the Parties.
10. NOTICES
Any notice, demand, consent, request, or other communication required or permitted to
be given or made under this Agreement shall:a. be given or made in the manner set forth in the Market Commercial Code or the Grid
Code, as applicable: andb. be addressed to the Service Provider or the representatives identified in the Admission
Application, or to any representative as changed and notified by the Service Provider
to the Market Operator.
Either Party may change its address and representative for notice by written notice to theother Party. Such change shall not constitute a modification of this Agreement.
In witness whereof the Parties hereto have, by their respective duly appointed andauthorized representatives, executed this Agreement on the date set forth hereinabove.

Signature of Authorized Representative of Service Provider
Name:

Title:

Date:

Page | 12

Signature of Authorized Representative of Market Operator
Name:

Title:

Date:

1.
Witness:Name:
Designation:
CNIC:
2.
Witness:Name:
Designation:
CNIC:

Page | 13