Islamabad, Dec 29: The government has successfully saved Rs. 1 trillion through renegotiated agreements with Independent Power Producers (IPPs), as announced by Power Minister Awais Leghari on Saturday. This achievement is attributed to a comprehensive “whole-of-government” approach, with additional support from Army Chief General Asim Munir.
Leghari explained that revised contracts with 16 IPPs are expected to be finalized shortly, while agreements with five IPPs have been terminated, resulting in savings of Rs. 411 billion. Additionally, settlements with eight bagasse-based IPPs have contributed Rs. 238.224 billion in savings. Ongoing negotiations with Chinese IPPs are anticipated to bring further financial benefits. The re-profiling of debt for a nuclear power plant has already led to a reduction in tariffs by Rs. 1.5 per unit.
The minister also shared plans to privatize IESCO, GEPCO, and FESCO by 2025. He announced the creation of three new entities under the National Transmission and Despatch Company (NTDC): the National Grid Company, the Energy Infrastructure Development and Management Company, and the Independent System and Market Operator.
In terms of tariff reductions, the government has successfully decreased electricity prices from Rs. 48.70 per unit in June to Rs. 44.04, with industrial rates dropping from Rs. 58.5 to Rs. 47.17 per unit. Additionally, a Rs. 150 billion elimination of industrial cross-subsidies is expected to support economic growth.
The government also plans to solarize 27,000 agricultural tube wells in Balochistan for Rs. 55 billion. Other initiatives include transitioning to electric vehicle tariffs, auctioning redundant assets through open auctions, and implementing special tariffs for households and industries as part of the Bijli Sahulat Package. Minister Leghari stressed the importance of addressing circular debt and poor recovery rates, which have led to Rs. 250 billion in annual losses.
