Govt working to complete the negotiations to save RS3.5TR on more IPP deals

• Senator Mohsin Aziz accuses IPPS of excessive offer.
• Govt has terminated six IPP contracts since July 2024.
• Revised agreements have been signed for 12,000 MW.
  

ISLAMABAD: The government is working to finalize negotiations with 75 more electricity producers – mainly solar and wind – by the end of April or May, after completing the talks with 29 independent electricity producers (IPPs) that would save RS3,498 trillion Federal Minister of Power Awais Leghari.

When informing a parliamentary committee, The news He said Leghari added that the government also worked in a plan to borrow RS1.2 trillion from commercial banks to manage the growing circular debt in the electricity sector. The renegotiation of agreements with producers will not only create savings but also help reduce circular debt.

Senator Mohsin Aziz, chairman of the Senate Standing Committee on Power, accused the IPPs of excessive offer and criticizes the inflated cost of the project.

“The wind stations installed between 2012 and 2014 are the real culprits,” he said, accusing the high invoices for the financial burden of consumers.

Since July 2024, the government has terminated six IPP contracts and revised agreements for eight Bagasse -based electricity plants. However, negotiations with 75 IPPs are still pending. Officials noted that 29 agreements had been finalized, while wind and solar projects remained an important stuck point, as policy -makers are struggling to balance cost reductions with investor confidence.

The Minister of Power, while briefing the Parliamentary Committee, recognized the international resistance in Pakistan’s efforts to renegotiate power contracts.

Even foreign diplomats have intervened in the matter, he told legislators. Nevertheless, the negotiations made a mutual consent, with the government hoping to conclude all the agreements by the end of April or at the beginning of May, he informed the team.

The revised agreements had already been signed for a capacity of 12,000 Megawatts (MW), including 14 private power plants with a combined production of 3,200 MW and six state power plants. However, negotiations for 15,615 MWs of government stations remained unresolved, he said.

The government’s revised solar policy also came under control, with Senator Shibli Faraz questioning its impact on thousands of consumers.

Minister Leghari has revealed that Pakistan has 282,000 pure solar consumers with a total installed capacity of 4,100 MWs. The new policy has not yet been approved by the Federal Council, as the prime minister has guided a review to ensure viability and justice.

Politics will not affect existing consumers, but would introduce stricter regulations for new applicants, the minister said.

Faraz criticized the plan to purchase electricity from solar consumers to RS10 per unit while selling it to RS50, calling the unjustified weight to the public. Leghari defended pricing, arguing that capacity fees must be recovered to ensure the stability of the network.