The federal government will soon announce new deals with Independent Power Producers (IPPs).
IPP owners were strongarmed in accepting the new terms and any changes to the payment structure will reduce the base electricity tariff by Rs. 2/unit, reported Business Recorder.
Plant owners from companies like Hubco, Rousch, Atlas, Nishat Group, and Saba Power met with the Task Force led by Minister for Power Awais Leghari. Reportedly, some owners reluctantly agreed to the revised terms of their contracts despite discrepancies in the provided figures.
Some companies, including Attock Gen, Liberty Dharki, and Gul Ahmad, have already made reductions, while others are in discussions with officials.
It bears mentioning that 33 IPPs were paid Rs. 979.3 billion in FY24 in capacity charges for producing little to no electricity.
Negotiations also covered legal disputes with 12 IPPs at the International Court of Arbitration, where the government claims overpayments of Rs. 50 billion.
Leghari hinted at positive news in the coming weeks regarding revised IPP deals but ruled out drastic reductions in tariffs.
Editorial & Legal Practice Group
Authored and reviewed by the corporate law and tax litigation practice group at Javid Law Associates. Our team comprises High Court advocates, corporate legal advisors, and authorized tax practitioners across Pakistan.
Advocates High Court & Tax Counsel
Jurisdiction: Pakistan