The government is also set to revise the current electricity pricing framework, particularly for consumers using more than 201 units of electricity
ISLAMABAD: In a decisive move aimed at alleviating the financial burden on the public due to high electricity costs, the Pakistani government has announced a comprehensive review and termination of agreements with 15 Independent Power Producers (IPPs). The initiative, led by Energy Minister Awais Leghari, represents a significant shift in the country’s energy policy.
The government has finalized a framework under which contracts with six IPPs, established in the 1990s, will be terminated immediately. These IPPs include Gul Ahmed Energy Limited, Kohinoor Energy, Liberty Power Project, Tapal Energy Limited, Attock Generation, and KAPCO. The decision is part of a broader strategy to address the exorbitant costs associated with these agreements, with no extensions planned for these contracts.
Additionally, agreements with nine other IPPs will be phased out gradually over the next three to five years. This group includes Lal Pir, Pakgen, Fauji Kabirwala Power, Habibullah Coastal, Japan Power Generation, Saba Power, Hubco, Southern Electric Power, and Rousch Power. The phased approach aims to manage the transition smoothly while minimizing disruptions to the energy supply.
In conjunction with these terminations, the government is set to revise the current electricity pricing framework, particularly for consumers using more than 201 units of electricity. The existing policy for this consumption slab, which has been in place for six months, will be updated. The proposed plan introduces special slabs with a potential new rate of Rs26 per unit for those exceeding the 201-unit threshold. This change is expected to provide further relief to consumers facing high electricity bills.
Federal Minister Awais Leghari emphasized the critical importance of these reforms for Pakistan’s economic stability. “We are implementing reforms in the energy sector and will ensure their execution,” Leghari stated. He highlighted the need for a coordinated approach to these reforms, with the national task force overseeing a detailed 20-point reform agenda. “The sooner we address these issues, the quicker the economy will stabilize,” he added.
The government’s initiative reflects a broader effort to address systemic issues within the energy sector and provide tangible relief to the public. By revising agreements with IPPs and restructuring pricing policies, the administration aims to ease the financial pressure on consumers and promote a more sustainable and efficient energy sector.
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