NewzShewz
No Result
View All Result
Friday, June 20, 2025
  • Home
  • Finance
  • Politics
  • Energy
  • International
NewzShewz
  • Home
  • Finance
  • Politics
  • Energy
  • International
No Result
View All Result
NewzShewz
No Result
View All Result
Home Energy

Cabinet okays revision of 14 IPPs pacts

by AMG
January 14, 2025
in Energy
0
ECC approves Winter Package
600
VIEWS
Share on FacebookShare on Twitter

ISLAMABAD: The federal cabinet has approved revised agreements with 14 IPPs shifting the Return on Equity (RoE) from capacity-based calculations to payments based on actual electricity sold, with a minimum dispatch rate of 35%. This agreement comes after extensive negotiations, marking a significant reform in Pakistan’s power sector.


These revised agreements were presented before the federal cabinet on Tuesday for its nod.
The Task Force on Power Sector Reforms, led by Minister for Power Awais Leghari and co-chaired by Special Assistant to the Prime Minister on Power, Muhammad Ali, concluded talks with 14 IPPs. Ten of these were set up under the 2002 power policy, while the remaining four were part of the 1994 power policy. While agreements with most IPPs were reached, discussions are still ongoing with Halmore Power Generation Company.


A key figure in these successful negotiations was National Coordinator Lt. General Zafar Iqbal, whose leadership helped the government recover over Rs. 30 billion in excess payments from IPPs. An additional Rs. 80 billion was saved through the waiver of outstanding late payment interest. These renegotiations are expected to generate annual savings of Rs. 65 billion on capacity payments, resulting in a total of over Rs. 500 billion in savings over the remaining operational lifespan of these plants.
The government, however, has claimed that

cumulative saving from the revision will be Rs 802 billion and overall financial benefit to consumers will be of around Rs 950 billion. The annual benefit to consumers will be of Rs 137 billion per annum whereas savings to the government will be in the range of Rs 1.4 trillion. Talks with one IPP is at final stages whereas negotiations with other three are in progress.
The newly agreed financial model will dramatically reduce future capacity payments and recoup “excess profits” previously earned by the IPPs, particularly in relation to fuel costs and other expenditures. The renegotiations also lead to the elimination of the ‘take-or-pay’ structure, which guaranteed IPPs fixed payments, regardless of actual electricity generation. Instead, future RoE will be based on actual energy generation, with a minimum threshold to ensure operational sustainability.


The agreement also revised the Operations & Maintenance (O&M) cost model, basing future payments on actual expenses, in line with National Electric Power Regulatory Authority (NEPRA) regulations. Moreover, RoE payments will now be exclusively in rupees, replacing the previous USD-based system. The fixed RoE rate is set at 17%, based on an exchange rate of Rs. 168 per USD.


In a significant move, all outstanding interest payments were waived, and the Task Force recovered excess profits previously earned by the IPPs. Power Minister Sardar Awais Leghari highlighted that these efforts, including the renegotiations, have resulted in a cumulative financial benefit of Rs. 1.1 trillion, directly benefiting electricity consumers.
Leghari also extended his appreciation to Army Chief General Asim Munir and his team for their unwavering support throughout this process, saying that he has no hesitation to acknowledge this.

Related Posts

 Guddu  Power Plant: a hub of scandals
Energy

PCCC, CPGCL ink Guddu 747 O&M pact

by AMG
June 20, 2025
0

ISLAMABAD : Power Construction Corporation of China (PCCC) and Central Power Purchasing Agency Limited (CPGCL) are all set to sign...

Read more
PC Board takes key decisions
Energy

8 parties show interest in PIA

by AMG
June 19, 2025
0

ISLAMABAD: Eight parties have shown interest in acquisition of stakes of Pakistan International Airlines (PIA)According to Privatisation Commission, it had...

Read more
  • Trending
  • Comments
  • Latest
Dasu Transmission Line Controversy Continues

OSD DMD refutes incompetence label , highlights NTDC leadership flaws, WB project issues, corruption, and contractor influence”

June 12, 2025
Newzshewz Exclusive

NTDC BoD removes ” incompetent ” officials

April 23, 2025
GoP Receives Notice from Halmore Power Company Regarding ‘Forced’ Negotiated Settlement

GoP Receives Notice from Halmore Power Company Regarding ‘Forced’ Negotiated Settlement

December 8, 2024
Refineries seek FM intervention for removal of GST exemption on petroleum products

 ECC Likely to approve Rs 4.12/litre fuel price hike to support refineries, OMCs

May 14, 2025
Enhanced Rationalization in the Categorization of SOEs

Enhanced Rationalization in the Categorization of SOEs

0
PPIB to extend TLoS of ZSPL

PPIB to extend TLoS of ZSPL

0
CCP Fines Diamond Paint Industries PKR 5 million

CCP Fines Diamond Paint Industries PKR 5 million

0
Steering Committee on Discos

Steering Committee on Discos

0
 Guddu  Power Plant: a hub of scandals

PCCC, CPGCL ink Guddu 747 O&M pact

June 20, 2025
PC Board takes key decisions

8 parties show interest in PIA

June 19, 2025
PC Board takes key decisions

PC Board takes key decisions

June 19, 2025
Budget 2025-26: More Pain than Gain: PRAC

MoF inks $ 1 billion 5- year long-term financing facility

June 18, 2025
  • Home
  • About
  • Contact Us
  • Privacy Policy
  • Cookie Policy
  • Terms and Conditions
Contact us: contact@newzshewz.com

No Result
View All Result
  • Home
  • Finance
  • Energy
  • International
  • Politics
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.