Prime Minister Sharif underscored that these reforms are part of a wider economic recovery plan, saying, “With the grace of Almighty Allah, the national economy is stabilising swiftly”
By our correspondent
ISLAMABAD: In a decisive move towards providing relief to the public, the federal government announced on Thursday the termination of several Independent Power Producers (IPP) agreements, a step expected to yield significant savings and reduce electricity tariffs for consumers. During a cabinet meeting chaired by Prime Minister Shehbaz Sharif, the decision to end contracts with five IPPs—HUBCO, Lalpir, Saba Power, Rousch Power, and Atlas Power—was made, signaling a landmark shift in Pakistan’s energy policy. This measure is forecast to save consumers Rs60 billion annually and generate a total saving of Rs411 billion for the national treasury.
Prime Minister Sharif praised the IPPs for voluntarily agreeing to terminate their agreements, describing the move as being “in the national interest.” He highlighted the importance of these companies’ cooperation in initiating much-needed reforms in the energy sector. “These five IPPs have played a crucial role in providing public relief,” the premier said, commending both the cabinet and the Task Force on Power Sector Reforms for their dedicated efforts. The initiative, he added, marks the first phase of broader reforms that will see more IPP agreements reviewed with the aim of gradually lowering electricity tariffs across the board.
Among the terminated contracts, Rousch Power, which was established under a Build-Operate-Transfer (BOT) arrangement, will now be transferred to the government for privatization through the Privatization Commission. The remaining four IPPs will retain ownership, though the government will no longer make any additional payments on their contracts. Prime Minister Sharif underscored that these reforms are part of a wider economic recovery plan, saying, “With the grace of Almighty Allah, the national economy is stabilising swiftly.”
The Prime Minister also highlighted a milestone in remittances, as overseas Pakistanis sent a record $8.8 billion back home in the last quarter, underscoring their confidence in the government’s policies. “We are deeply grateful to our hardworking compatriots abroad,” Sharif said, reaffirming the government’s commitment to public welfare. He also noted a significant reduction in inflation, which has dropped from over 30 percent to 6.9 percent, offering much-needed respite to citizens after months of economic strain.
This bold move to terminate the IPP agreements marks the beginning of wider reforms aimed at ensuring the sustainability of the energy sector while delivering economic relief to the public. As Pakistan continues to grapple with the challenges of inflation and a volatile global economy, the government’s actions suggest a firm commitment to fulfilling promises made to the public—especially those that tackle the burden of high energy costs. Whether this step will lead to lasting change remains to be seen, but for now, it signals a clear attempt to put the country’s energy sector on a more sustainable path.