Govt to end power purchase agreements with six more IPPs

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The federal government has decided to terminate electricity purchase agreements with six more Independent Power Producers (IPPs), a move expected to save Rs300 billion.

Government sources confirmed the development, revealing that these six IPPs account for a combined capacity of 2,396 megawatts. By ending these contracts, the government anticipates significant savings.

The affected IPPs include Gul Ahmed Energy, with a 136 MW agreement, and the KEPCO Power Project, with a 1,638 MW contract. Additionally, Liberty Power’s 200 MW, Attock Power’s 165 MW, Koh-e- Noor Energy’s 131 MW, and Tapal Energy’s 126 MW agreements will also be terminated.

The decision is part of the government’s ongoing efforts to reduce electricity tariffs, with the cancellation of these costly agreements contributing to the reduction of capacity payments, which currently total approximately Rs2,000 billion annually.

This follows the government's previous termination of contracts with 13 other IPPs, including agreements with eight private power plants running on bagasse.

The PM had earlier set up a task force to negotiate with IPPs, as part of a broader strategy to reduce energy costs in Pakistan.