Power minister tells NA: Early termination of pacts with 6 IPPs helps govt save Rs411bn

ISLAMABAD: Minister for Energy (Power Division), Sardar Awais Ahmad Khan Leghari Friday said as per the calculations shared by the taskforce, the early termination of six Independent Power Producers (IPPs) would result in overall savings of around Rs411 billion.

In written reply to a question, the Minister for Energy (Power Division), told the National Assembly that the government has constituted a Task Force on Implementation of Structural Reforms in Power Sector.

He said the taskforce is holding negotiations with the IPPs to review the agreements for reduction in the tariff.

PPAs, IAs without coercion: Govt secures written confirmation from IPPs

“Pursuant to the efforts of the Task Force, Power Purchase Agreements with six (06) IPPs have been terminated whereas revision is made in agreements for tariff reduction with eight (08) baggasse-based Power Plants. Similarly, fourteen (14) thermal IPPs have agreed to reduce their tariffs,” he said.

He said that further, savings on account of revised tariff terms with 08 baggasse Power Projects and 14 IPPs of Power Policy 1994 and 2002 is estimated around Rs238 billion and Rs922 billion respectively over the remaining life of these projects.

Answering another written question, the minister said that the federal government has been actively engaged with IPPs and power sector reforms have been initiated with an aim to reduce consumer end prices for electricity.

He said that in this regard a task force was constituted which has been successful in bringing multiple proposals before Cabinet for reforms in power sector with an aim to reduce prices.

He said that the federal government has recently announced a huge reduction in electricity prices for all consumers.

The minister said that the prime minister of Pakistan has announced that through various initiatives and power sector reforms such as IPP renegotiations a substantial reduction of Rs7.41/unit in average tariff will be provided to consumers on the consumption of April 2025 after due regulatory process.

Before the start of the current financial year, he said that the national average consumer-end tariff in the month of June 2024 wasRs48.70/unit. He said that the current national average consumer-end tariff in the month of April 2025 is expected to be Rs45.05/unit before any further reduction.

He said that after the Rs7.41/unit tariff reduction announcement by the prime minister, the national average consumer-end tariff shall becomeRs37.64/unit.

He said that International Monetary Fund (IMF) has endorsed the initiatives of the government and are also part of the Extended Fund Facility (EFF) programme under implementation.

Copyright Business Recorder, 2025