Foreign Governments Express Concerns Over “One-Sided” Power Agreements with Pakistani IPPs

The Pakistani government is reportedly receiving concerns from foreign governments regarding “one-sided” agreements with certain Independent Power Producers (IPPs), according to Business Recorder.

Among the key concerns is the Negotiated Settlement Agreement (NSA) with M/s Rousch Power Project Limited (RPPL), a company owned by the family of former Commerce Minister Abdul Razak Dawood.

Under the NSA, RPPL is to transfer its power complex to the government for just one USD and will receive Rs 5.5 billion for early termination of the OFME period, plus Rs 2.8 billion for maintaining the complex until transfer. However, Germany has expressed reservations, particularly through Siemens, a stakeholder in RPPL.

Germany’s Federal Foreign Office communicated that the settlement agreement is seen as unfavorable to foreign investors and could damage future bilateral relations. The German government has urged for renegotiations, warning of the potential risks to broader economic ties between Pakistan and Germany.