Govt terminates agreements with six more IPPs

ISLAMABAD: The federal government has taken another significant step in addressing high electricity costs by deciding to terminate agreements with an additional six Independent Power Producers (IPPs). 

This move is expected to save the national exchequer another Rs300 billion. 

On Tuesday, he federal cabinet approved tariff revisions for eight IPPs based on recommendations from the Special Task Force on IPPs.

The IPPs whose tariff revisions have been approved include JDW, Chiniot Power, Hamza Sugar, Al-Moiz Power Plant, Thal Industries, and Chenar Energy.

Prime Minister Shehbaz Sharif, while chairing the cabinet meeting, highlighted that the decision follows the cancellation of agreements with five other IPPs, which were terminated with the consent of their owners.

He noted that the government would only clear outstanding dues to these IPPs without any additional interest.

The PM had said that this termination would provide an annual relief of Rs60 billion to the public and result in overall savings of Rs411 billion for the national treasury. 

Earlier, a task force led by Owais Leghari was formed to renegotiate terms with IPPs. The initial phase saw the voluntary cancellation of agreements with five IPPs, whose owners prioritized national interest over personal gain. 

The government ensured that the previous dues of these IPPs would be cleared, excluding any interest payments. Shehbaz Sharif expressed gratitude to the IPP owners for their cooperation, underscoring that the move would lead to reduced electricity prices for consumers.

Meanwhile, the PM also directed the authorities concerned to further reduce electricity rates for consumers and expedite the implementation of future electricity generation strategy.

Chairing a meeting to evaluate and discuss the future electricity and power plans of country in Islamabad Friday, he said only low-cost electricity projects should be prioritized in future.

He added that local resources should be given priority for power generation.

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Shehbaz Sharif said that hydropower projects are low-cost sources of electricity that provide environment-friendly and affordable electricity to consumers. He said the existing power generation should also be converted to solar energy as environment-friendly and low-cost solar energy is being used to generate electricity worldwide. He said Pakistan is fortunate to have vast potential for solar energy.

Shebaz instructed to take immediate action against all officers who are deliberately trying to hinder reforms in the power sector.

Besides, the prime minister called for expediting implementation of the ongoing reforms in the power transmission system. He instructed to modernize the power transmission system as per international standards.