Federal Energy Minister Awais Leghari announced that revised agreements with Independent Power Producers (IPPs) are expected to reduce electricity prices by up to Rs 5 per unit, following the government’s decision to refrain from purchasing electricity under current terms.
Addressing a briefing on the Electricity Facilitation Package at the FPCCI in Islamabad, Leghari emphasized the significant role of the business community in boosting the country’s economy. He noted that Pakistan has struggled to implement an affordable electricity formula, pointing out that only 7,000 MW of the 17,000 MW purchased meets efficiency standards.
Leghari stated that the government had successfully terminated contracts with five IPPs and made progress in renegotiating agreements with 11 others, declaring that no “sacred cows” remain in the power sector. He described the reform efforts as revolutionary, adding, “Such change does not happen in sit-ins at D-Chowk.”
He also shared that contracts with bagasse power plants had been finalized, contributing to more affordable electricity. Leghari took the opportunity to debunk the misconception that hydropower is inherently cheap, stressing that ongoing reforms aim to address sector inefficiencies.
The Minister criticized the high electricity costs of Rs 26 per unit, which are far above regional averages, and assured that the upcoming cabinet discussions would support the government’s decision to cease future electricity purchases under current conditions.
Leghari further highlighted improvements in governance, citing the appointment of Boards of Governors for electricity distribution companies (DISCOs). Over the first four months of the fiscal year, DISCOs reduced projected losses to Rs 11 billion, down from an expected Rs 350 billion. As a result of these reforms, the government anticipates a reduction in projected electricity purchase costs from Rs 40 trillion to Rs 32 trillion over the next decade.
