Cabinet approves settlement agreements with eight IPPs to lower power costs

The federal cabinet has approved settlement agreements with eight bagasse-based independent power producers (IPPs), aiming to save the national exchequer Rs. 238 billion.

According to a report by Pak Observer on Wednesday, this follows the earlier cancellation of power purchase agreements with five IPPs, which promised annual savings of Rs. 60 billion or Rs. 411 billion over the remaining contract term.

Chaired by Prime Minister Shehbaz Sharif, the cabinet’s decision came on the recommendation of the Ministry of Energy and the Power Division, as stated by the Prime Minister’s Office. The affected IPPs include DW Unit I, Unit II, RYK Mills, Chiniot Power, Hamza Sugar, Al-Moez Industries, Thal Industries, and Chinar Industries.

Officials informed the cabinet that the Central Power Purchasing Agency will approach the National Electric Power Regulatory Authority to reduce tariffs for electricity generated by these plants. This move is expected to decrease power prices for the public and provide significant fiscal relief.

Prime Minister Shehbaz reiterated the government’s commitment to making electricity more affordable, emphasizing its efforts to ease financial burdens on the common man.