Islamabad, Dec 5: After extensive negotiations in Rawalpindi, Pakistan’s government and 17 Independent Power Producers (IPPs) from the 1994 and 2002 Power Policies have agreed on a hybrid ‘take and pay’ model.
The government expects savings of Rs. 200-300 billion from the revised agreements, which now await Cabinet approval and subsequent tariff determinations by NEPRA.
The new terms include rebased tariffs, capped insurance premiums, profit-sharing till FY’23, and a shift to local arbitration.
Key players like Nishat Chunian Power Limited have formally endorsed the amendments, with the model becoming effective from November 1, 2024.
This deal could reduce power tariffs by Rs. 3.50 per unit, potentially reaching Rs. 6.50 with Chinese IPP debt restructuring. Future rounds will involve renewable energy projects.
