Federal Minister for Energy (Power Division) Awais Leghari has said that discussions with the International Monetary Fund (IMF) regarding captive power plants were underway, with the potential to reduce electricity rates by Rs10-12 per unit.
Speaking at a session of the National Assembly’s Standing Committee on Energy on Thursday, Leghari expressed optimism that the matter was nearing resolution.
The minister revealed plans to review eight bagasse-based power plants and an additional 16 plants.
He noted that these evaluations would be followed by an assessment of government-owned plants’ return on equity. “By the end of this month, the issue of captive power plants will be resolved,” he said adding, “The electricity prices for domestic consumers have already been reduced by Rs4 per unit.”
The power minister expressed his ambition to lower the overall electricity rate by Rs50, but also cited the complexities of achieving this goal. Earlier this month, sources told the media that a tariff revision for eight bagasse-based power plants would save Rs238 billion, equating to an annual saving of Rs8.83 billion.
Additionally, the termination or modification of contracts with 16 more IPPs would result in a further benefit of Rs481 billion. These savings will be passed on to consumers in the form of reduced electricity costs.
Apart from finalising the terminating of contracts with five IPPs last year, the government, last month, also completed the negotiations with RFO-based plants under “take and pay” terms. Islamabad, as reported by The News, aims to slash electricity tariffs by Rs12 per unit by March 2025 through agreements with the IPPs and renewable energy sources like wind and solar power plants. “We will be able to reduce the power tariff by Rs3 per unit through talks with IPPs, GPPs, wind and solar power plants. And the debt re-profiling will further help reduce the tariff by Rs4 per unit,” a senior government official told the publication in December 2024.