In a landmark decision taking place on Thursday, the government propelled the cessation of agreements with Independent Power Producers (IPPs), a move poised to spare consumers a hefty Rs60 billion annually and induce a significant dip in electricity tariffs.
This strategic decision, determined at a federal cabinet meeting presided over by Prime Minister Shehbaz Sharif, aims not only to alleviate the financial strain on consumers by reducing electricity tariffs but also to confer a substantial saving of Rs411 billion upon the national treasury.
In the initial phase of this transformative initiative, agreements with five IPPs—HUBCO, Lalpir, Saba Power, Rousch Power, and Atlas Power—are set to be annulled. Such measures are anticipated to offer Rs60 billion in savings annually to electricity consumers, while also resulting in considerable financial preservation for the national coffers without any further payments to the IPPs regarding their outstanding dues.
The Prime Minister acknowledged that these IPPs have willingly chosen to terminate their agreements in the interest of the nation, praising their contribution as a benchmark for forthcoming reforms within the energy sector.
“These five IPPs have substantially contributed by ushering in the required public reprieve,” expressed the Prime Minister, further adding that the cabinet along with the Task Force on Power Sector Reforms merit commendation for their diligence.
Addressing the occasion, the premier articulated optimism regarding the nation’s economic resurgence, indicating, “With the benevolence of Almighty Allah, the national economy is rapidly stabilizing.”
He also reiterated the government’s commitment to the public, stating that they have fulfilled their promise of providing relief through hard work and dedication.
An official statement from PM House stated that further reforms in the power sector are being planned, with other IPP agreements being planned to be reviewed will gradually lower electricity tariffs.
Rousch Power, which was established under a Build-Operate-Transfer agreement, will be transferred to the government for privatization through the Privatization Commission. The other four IPPs will retain ownership, but the government will not make any additional payments post-agreement termination.
The Prime Minister also expressed gratitude to overseas Pakistanis, noting that remittances reached a record $8.8 billion last quarter, reflecting trust in government policies.
“We are thankful to our hardworking compatriots abroad who continue to send their IPP agreements termination, Independent Power Producers, electricity tariff reduction, energy sector reforms, Rs60 billion savings, Prime Minister Shehbaz Sharif, Pakistan power sector, HUBCO, Lalpir, Saba Power, Rousch Power, Atlas Power, national economy recovery, public relief, remittances, privatization commission, inflation reduction, Pakistan government policies.earnings back to Pakistan,” said PM Shehbaz.
The Prime Minister concluded by reaffirming his commitment to fulfilling all promises made to the public and addressing their concerns in the wake of rising inflation. He underscored that inflation, which once exceeded 30%, has now reduced to 6.9%, providing much-needed relief to the people.