As the government continues efforts to tackle rising electricity tariffs in the country, the federal cabinet on Tuesday approved “settlement agreements” with eight independent power producers (IPPs) a move that would benefit the national exchequer by Rs238 billion.
The federal cabinet meeting, under the chairmanship of Prime Minister Shehbaz Sharif, granted the approval on the recommendation of the Ministry of Energy and the Power Division, said a statement issued by the Prime Minister Office (PMO).
These bagasse-based power plants included DW Unit I, Unit II, RYK Mills, Chiniot Power, Hamza Sugar, Al-Moez Industries, Thal Industries and Chinar Industries.
The development came two months after the premier announced the pre-mature termination of power purchase agreements (PPAs) with the five oldest IPPs, with annual savings of Rs60 billion or around Rs411bn over the remaining term of their contracts.
The federal government was under immense pressure to reconsider its PPAs with the power plants following outcry across the country as the addition of capacity payment charges inflated the power bills beyond the affordability of the inflation-burdened masses.
During today’s meeting, the participants were informed that the Central Power Purchasing Agency (CPPA) would contact the National Electric Power Regulatory Authority (Nepra) regarding a reduction in the power tariffs produced by these power plants.
