Past IPP agreements lacked transparency: Leghari

Federal Minister for Energy Sardar Owais Ahmad Khan Leghari said on Thursday Pakistan was rapidly increasing its share of low-cost renewable energy, while acknowledging that several power-sector agreements signed with Independent Power Producers (IPPs) in the past “were not transparent”.

Speaking at a seminar organised by the Pakistan Business Council (PBC), the minister said the government was implementing a comprehensive set of reforms for the first time with a long-term policy direction for the energy sector.

“We have identified 28 major reforms, and results will start becoming visible soon,” he said.

Leghari said around 19,000 megawatts of solar power was being developed, adding that Pakistan was among the fastest-growing solar markets globally.

He noted that the share of renewable energy in the national energy mix had already reached 55%.

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The minister said the circular debt was being addressed through a combination of structural reforms and renegotiation of earlier IPP contracts, addeding that inefficient power plants were being phased out, while governance improvements and transparency being prioritised.

Leghari said the government was preparing amendments to net-metering regulations, improving the performance of distribution companies, and advancing the privatisation of DISCOs as part of the broader reform plan.

“The competitive electricity market will be launched in the coming months,” he added.

He said high fuel prices and the rupee’s depreciation had severely impacted the power sector, but the government was committed to stabilising it.

“The government will no longer remain the sole future buyer of electricity; direct transactions in the market will become the norm.”

Leghari said a strong regulatory review process was under way, and measures were being taken to ensure better governance, transparency and financial stability across the sector.