The government announced the termination of power purchase agreements with five Independent Power Producers (IPPs) on Thursday, providing an estimated annual relief of Rs. 60 billion to electricity consumers. Prime Minister Shehbaz Sharif said this move would save Rs. 411 billion for the national exchequer. The federal cabinet approved the termination of contracts with Rousch Power, Saba Power, LALPIR, HUBCO, and Atlas Power, aiming to reduce the burden of capacity payments on consumers.
Rousch Power, which was established under the Build, Own, and Operate (BOP) model, will be transferred to the government for privatization by the Privatization Commission. The remaining four IPPs will retain their ownership, and the government will no longer be responsible for any payments after contract termination.
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The Prime Minister hinted at plans to renegotiate contracts with additional IPPs in the future. He attributed the achievement to his economic team and noted that inflation has dropped from over 30% to 6.9%, ahead of projections. He also expressed gratitude to the five IPP owners for voluntarily agreeing to terminate their contracts and acknowledged the efforts of the federal cabinet and the power sector reform task force. Additionally, he highlighted a record inflow of workers’ remittances, reaching $8.8 billion in the last quarter.