The federal government has committed approximately Rs72 billion to five Independent Power Producers (IPPs) following their agreement to terminate contracts early.
The payments include Rs36.5 billion to Hubco, Rs15.5 billion to Rousch Power, Rs12.8 billion to AES Lalpir, Rs6 billion to Atlas Power, and Rs1 billion to Saba Power, as per sources.
The terminated IPPs, with a combined capacity of 2,400 megawatts, were previously found to have over-invoiced, raising the cost of electricity.
The decision to close these plants aligns with efforts to reduce electricity prices. Despite Pakistan’s coal reserves, IPPs relied on imported fuels, which resulted in costly power generation.
The federal cabinet approved the contract terminations on October 10, aiming to address issues related to inflated costs and inefficiencies.
The move follows revelations that IPPs had received substantial payments without generating electricity, with flawed contracts reportedly contributing to exorbitant power rates compared to neighboring countries.
