Cabinet approves new contracts with 15 IPPs to save Rs500 billion

ISLAMABAD: The federal cabinet has approved new contracts with 15 more independent power producers (IPPs).

The new contracts will save the national exchequer more than Rs500 billion annually while electricity will be cheaper by Rs10 to Rs11 per unit.

Prime Minister Shehbaz Sharif chaired the cabinet meeting, which approved new agreements with 15 more IPPs.

The federal cabinet also approved the termination of the contract with Chinese IPPs. The cabinet also decided to enter into a revised contract with the Kot Addu Power Company (KAPCO), an electric power company based in Lahore.

According to sources, after the new agreements, the government will not have to pay rs80 billion to these IPPs under the head of payment surcharge.

Also read: Govt terminates agreements with six more IPPs

Addressing the meeting, Prime Minister Shahbaz Sharif raised a question about the capacity payment charges receive by the government power generation companies (GENCOs). He asked why GENCOs, being power generation companies, were charging capacity payment as they belonged to the government. They are government projects and payments in dollars are a big problem.

Shahbaz Sharif said that the task force of the Ministry of Energy was working at a great pace and had achieved the targets of 3,000 megawatts with great effort.

The premier said that a few days ago, a wonderful conference was held in Islamabad regarding women’s education in the Islamic world, in which very good papers were presented regarding women’s education.

The cabinet also approved the merger of the Aviation Division with the Ministry of Defence, and the Narcotics Division with the Ministry of Interior.

The cabinet postponed the approval of the National Minorities Commission Act 2024. It ratified the decisions of the CCLC.

The cabinet extended the tenure of Muhammad Bashir Khan, a member of the environmental tribunal Islamabad, by two years.