Advertisement
Categories: BusinessNewsPakistan

Govt Renegotiating Power Deals with IPPs: Awais Leghari

Advertisement

Pakistan’s government is in talks to renegotiate contracts with independent power producers (IPPs) in a bid to curb “unsustainable” electricity tariffs, according to Power Minister Awais Leghari. The announcement comes as households and businesses struggle under the burden of rising energy costs.

The surge in power tariffs has fueled social unrest and forced industries to shut down in the country’s $350 billion economy, which has faced two contractions in recent years due to record inflation levels.

“The existing price structure of power in this country is not sustainable,” Leghari said during an interview with Reuters on Friday.

Negotiations are ongoing between power producers and the government, with both parties agreeing that “the status quo can’t be maintained,” Leghari added.

He highlighted the need for all stakeholders to compromise to a degree, while ensuring business viability remains intact. He emphasized that this resolution must be reached “as soon as possible.”

A decade ago, Pakistan faced severe power shortages, leading to the approval of numerous private power projects, largely funded by foreign lenders. The agreements offered lucrative incentives, including high guaranteed returns and commitments to pay for unused electricity.

However, the country’s prolonged economic crisis has slashed power consumption, leaving it with excess energy capacity that it is obligated to pay for.

Unable to cover the costs, the government has passed these fixed charges and capacity payments on to consumers, sparking protests from both households and industry groups.

Four anonymous power sector insiders revealed to Reuters that the proposed contract changes include cutting guaranteed returns, limiting dollar-linked rates, and halting payments for unused electricity.

Advertisement
News Desk

Recent Posts

Farhan Ghani Arrested Over Alleged Assault on Government Servent, FIR registered

Pakistan Peoples Party (PPP) local leader and Chanesar Town Chairman Farhan Ghani has been arrested…

1 week ago

inDrive Partners with Essa Labs to Offer Drivers Up to 40% Off on Health Tests

inDrive, a global mobility and urban services platform, has joined hands with Essa Labs to…

3 weeks ago

tapmad Champions Hockey On and Off the Screen: Shamsher and Live Tournaments Bring the Sport Back into the Spotlight

tapmad Entertainment has cemented its position as a pioneer in Pakistan’s digital entertainment space, not…

3 weeks ago

Airblue Announces 14% Discount on Fares in Celebration of Independence Day

Airblue, one of the country’s leading private airlines, has announced a 14% discount on selected…

3 weeks ago

Ecommerce sector urges Govt for tax reduction and level playing field: PEA

The Pakistan eCommerce Association (PEA) has urged the government to reduce the tax burden on…

3 weeks ago

Digital Inclusion, Affordability, and the Battle Against Cash Dominate Jazz Leadership’s GSMA Summit Address

From highlighting the need for affordable smartphones and universal internet to pushing for a cashless,…

3 weeks ago