Federal Minister for Power Sardar Awais Ahmed Khan Leghari said the government has initiated talks with the Chinese Independent Power Producers (IPPs) to renegotiate agreements.
“We have already initiated talks with Chinese IPPs,” said Leghari, adding that this effort alone has resulted in a reduction of Rs1.25 per unit in electricity rates.
“All benefits from the renewal of contracts with the IPPs will be passed on to the consumers,” he said.
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Addressing media persons on Saturday, Leghari, while giving an overview of the energy sector performance during the last nine months, said the process of energy sector reforms is progressing rapidly.
He shared that the government remains committed to resolving the energy sector crisis within the next four years.
Highlighting savings, Leghari informed that the government terminated contracts with five IPPs. “This resulted in the saving of Rs411 billion,” he said.
Moreover, Rs238 billion was saved through agreements with eight bagasse plants owned by sugar mills.
“The government worked as a whole and made savings of about Rs650 billion. In addition, negotiations with 16 more IPPs, to be announced in the coming days, are expected to save another Rs421 billion.”
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Leghari maintained that the Ministry of Energy is providing facilities to the industry on a priority basis.
Talking about electricity distribution companies (Discos), Leghari informed that Discos incurred significantly lower losses in the first five months of the current fiscal year as compared to the same period last year.
“We anticipate a 50% reduction in losses by the end of this fiscal as compared to last year.”
The energy minister shared that in collaboration with the Ministry of Finance, it has initiated the debt restructuring process of the energy sector.
“This is a crucial step that, if implemented successfully, will alleviate the burden on electricity consumers,” Leghari said.
The minister shared that the new Indicative Generation Capacity Expansion Plan (IGCEP) is in the final stages.
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He informed a company has been established for the sale and purchase of electricity.
Leghari said an EV policy is expected to be approved in the coming weeks.
The minister admitted a dearth of EV charging infrastructure in the country. “At present, these charging stations are selling electricity at Rs71 per unit, which shall be brought down.”
Responding to a query, Leghari expressed concern over the decline in overall electricity demand. “We have serious concerns about it and this reduction is contributing to an increase in electricity rates.”
“The decline in electricity rates will lead to demand improvement,” he expressed.
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