ISLAMABAD: At least eight Independent Power Producers (IPPs) from the 1994 and 2002 Policies are reported to have signed Negotiated Settlement Agreements with the Task Force on Energy, headed by the Minister for Power, Sardar Awais Khan Leghari.
Highly placed sources informed NewzShewz on Wednesday that “eight have signed,” although the names of the IPPs were not disclosed. The negotiations, which involved detailed discussions between the Task Force and the representatives of the IPPs, have led to some concerns. Certain IPPs have argued that the write-off of Late Payment Surcharge (LPS) could push them into bankruptcy. Earlier reports indicated that three IPPs—Engro Powergen (Gas), Sapphire Power (Gas), and Fauji Kabirwala—had initially signed.
The Task Force on Energy, which includes the Minister for Power, Special Assistant to the Prime Minister on Power Muhammad Ali, Lt. General Muhammad Zafar Iqbal, Chairman of NEPRA, and the CEO of CPPA-G, among others, has successfully negotiated the premature termination of contracts with five IPPs. These include HUBCO, Lalpir, Saba Power, Rousch Power, and Atlas Power. Additionally, revised agreements have been signed with eight bagasse-fired IPPs, including one owned by the Prime Minister’s son.
The government has projected savings of Rs 412 billion from the remaining period of contracts with the five IPPs (HUBCO, Lalpir, Saba Power, Rousch Power, and Atlas Power), a move already approved by the federal cabinet. Savings from the revised arrangements with the eight bagasse-based IPPs are estimated at Rs 80-100 billion, although these are still awaiting cabinet approval.
The Task Force is now focusing on 17 IPPs set up under the 1994 and 2002 policies. Three of these—Engro Powergen (Gas), Sapphire Power (Gas), and Fauji Kabirwala—have partially signed the revised agreements. However, some IPPs are resisting the changes and are unwilling to return the extra profits of Rs 55 billion.
Earlier reports had indicated an overpayment of Rs 55 billion, with some IPPs agreeing to return the excess profits. However, those that made substantial profits are still resisting the proposed revisions. The next round of negotiations, expected next week, will involve Government Power Plants (GPPs), followed by revisions for wind and solar projects.
On November 19, 2024, Prime Minister Shehbaz Sharif stated that IPPs had earned a 10% extra profit beyond their agreements.
On October 27, a joint letter from nine IPPs—including M/s Pakgen Power, M/s Nishat Power, M/s Nishat Chunian, M/s Hubco Narowal, M/s Kohinoor Energy, M/s Liberty FSD, M/s Halmore, M/s Laraib, and M/s Orient Power—was sent to the Prime Minister. The letter addressed concerns that various government bodies and media outlets had claimed that capacity payments to private IPPs were making consumer tariffs unaffordable. M/s Sapphire sent a separate letter on the same issue. The Prime Minister’s office has since requested a report from the Power Division regarding both letters.
Sources indicated that the revised pacts with all 17 IPPs are expected to be finalized within the next 10-15 days.
