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The government plans to reduce electricity tariffs by Rs12 per unit by March 2025 through agreements with private Independent Power Producers (IPPs), government-owned power plants, and renewable energy sources like wind and solar.
As per media reports, in the first phase of the plan, the government terminated power purchase agreements with five IPPs (M/s Hubco Power, M/s Rousch Power, AES Lalpir Power, Saba Power Plant, and Atlas Power) and recently canceled the contract with Pakgen Power Limited (365 MW), bringing the total number of terminated contracts to six.
The official said, “We expect a Rs3 per unit reduction in tariffs through negotiations with IPPs, government power plants (GPPs), wind, and solar energy facilities. Debt reprofiling could further lower tariffs by Rs4 per unit, while tax reductions on electricity bills could result in an additional Rs5 per unit decrease. This would bring the off-peak tariff from Rs41.68 to Rs29.68 and the peak-hour tariff from Rs48 to Rs36.”
The power task force aims to conclude negotiations with 18 IPPs and transition their contracts to a Take-and-Pay model, with 15 of the 18 already signing revised agreements.
Following this, talks will shift to government power plants, including nuclear, hydropower, coal-based, and RLNG-based facilities, as well as provincial power plants and GENCOs. Discussions with renewable energy sources will begin after finalizing the government plants negotiations, with the goal of completion by February 2025.
