The Power Division has announced the closure of five Independent Power Producers (IPPs) following successful negotiations, a decision that is expected to save Rs. 411 billion for the national treasury. This update was shared during a briefing to the Senate Standing Committee on Energy on Monday.
Chaired by Senator Mohsin Aziz, the committee was also informed that contracts with eight bagasse power plants, which were previously dollar-based, have been canceled, with new agreements now in place. These changes are expected to save an additional Rs. 238 billion.
The committee agreed to review a report by Senator Shibli Faraz concerning the power sector’s circular debt. Senator Faraz raised concerns, stating, “How can electricity become cheaper with such a massive circular debt? Exports will not increase if electricity remains expensive.”
These actions are part of the government’s strategy to address inefficiencies in the power sector and reduce the mounting circular debt, a longstanding issue in the energy sector.
