Advertisement
News

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

Karachi Traders Report Disappointing 2025 Eid Sales

Despite crowded markets and high expectations, Karachi’s traders have expressed disappointment over sluggish sales during…

7 hours ago

PM Announces Reduced Electricity Tariff: Here’s What You’ll Pay Now

Prime Minister Shehbaz Sharif has announced a reduction in electricity tariffs, lowering the national average…

7 hours ago

Farhan Saeed and Kinza Hashmi Star in Highly Anticipated Drama Shirin Farhad

The much-anticipated drama Shirin Farhad has officially hit the screens, and fans can’t stop talking…

7 hours ago

PepsiCo Pakistan Continues “Filling Hearts” Initiative, Distributing 750,000+ Meals to Communities

PepsiCo Pakistan is advancing its food security efforts this Ramadan through the "Filling Hearts" initiative,…

7 hours ago

BYD Reports Record-Breaking Revenue of RMB 777.1 billion in 2024

BYD released its 2024 financial report, with key indicators reaching record highs! The company achieved…

1 week ago

Eid in Dubai: All You Need to Know

Eid in Dubai is a time of joy, celebration, and togetherness, bringing a unique blend…

1 week ago