Islamabad, Mar 25, 2025: After securing agreements with 29 Independent Power Producers (IPPs) to achieve savings of Rs. 3.498 trillion, the government is now in discussions with an additional 75 power producers, primarily focusing on solar and wind energy projects.
These negotiations are expected to conclude by April or May 2025.
Federal Minister for Power, Awais Leghari, informed a parliamentary committee on Wednesday that the government is also pursuing a Rs. 1.2 trillion loan from commercial banks to address the growing circular debt crisis.
Since July 2024, six IPP contracts have been revoked, while agreements with eight bagasse-based power plants have been revised.
However, progress with solar and wind energy providers remains uncertain, with foreign diplomats stepping in to influence discussions.
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Senator Mohsin Aziz criticized the IPPs for excessive invoicing and pointed out that wind projects initiated between 2012 and 2014 led to unreasonably high tariffs.
To date, renegotiated contracts cover 12,000 MW, including 14 private-sector power plants (3,200 MW) and six government-owned facilities.
However, a capacity of 15,615 MW in state-run power units is yet to be addressed.
The government’s solar energy policy has also come under debate.
Senator Shibli Faraz questioned the rationale behind purchasing electricity from solar consumers at Rs. 10 per unit while selling it at Rs. 50 per unit, calling it unjust.
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In response, Leghari defended the policy, stating that capacity charges are necessary to maintain grid stability.
The prime minister has directed a review of the pricing model before it goes to the cabinet for approval.
This ongoing power sector reform aims to ensure financial sustainability while transitioning to cleaner energy sources.
However, concerns over tariff structures and financial viability continue to spark debates among policymakers.
