Ministry discloses costly agreements with IPPs

ISLAMABAD: The Ministry of Energy on Friday presented the details of the costly agreements with all furnace oil-fired Independent Power Producers (IPPs) in the Senate.

According to documents, 11 IPPs have the combined capacity to generate 2,767 megawatts (MW) of electricity.

These plants, which generate the most expensive electricity in the country, sell their output to the government.

The cost per unit of electricity from these private power plants ranges from Rs31 to Rs44. The unit price of electricity from Saba Power Plant stands at Rs43.86, with the contract set to expire at the end of 2029.

The contracts of Narowal Energy Ltd and Liberty Power Tech Ltd will expire in 2036, while those of Nishat Chunian Power Limited, Nishat Power Limited, and Atlas Power Limited will terminate in 2035.

The unit cost of electricity from Nishat Chunian Power Plant is Rs42. The same rate applies to Habco Power Company’s electricity. The contracts of Habco Power Company and Koh Noor Energy will expire in 2027, whereas the contracts for Lal Peer Power Plant and Pakistan China Power Plant will end in 2028.

The Attock Generation Power contract is set to expire in 2034.

It should be noted that the National Electric Power Regulatory Authority (NEPRA) approved an additional hike of Rs3.33 per unit in electricity tariffs on Friday, a day after the Ministry of Energy announced a substantial increase of approximately Rs7 per unit, effective July 1. The NEPRA notification, which enforces the hike under fuel adjustment charges, takes immediate effect and will impact July bills.