ISLAMABAD: The federal government has disbursed Rs142 billion to over a hundred Independent Power Producers (IPPs) in order to settle their outstanding dues and lessen the burden of power sector circular debt.
The payables to these power generators had reached a staggering Rs1.77 trillion by the end of May 2023, marking an increase of Rs420 billion since July 2022. Notably, according to the latest monthly figures released by the Ministry of Energy (Power Division), the country’s energy sector’s circular debt stock was at Rs2.646 trillion by the end of May 2023, with an accumulation of Rs394 billion in 11 months from July 2022 to May 2023.
The disbursement of Rs142 billion was executed on June 27, following the approval of the Economic Coordination Committee (ECC) and the federal cabinet. This move aligns with the International Monetary Fund’s (IMF) recommendations for reforms and progress in the energy sector, as stipulated in the recently signed staff-level agreement for the Stand-By Arrangement (SBA) facility, amounting to $3.0 billion. Last year, the government had already paid Rs385 billion to IPPs.
The latest payment of Rs141.99 billion was distributed among 109 IPPs, with the largest share of Rs44.68 billion (31.5 percent) going to coal-based generators, followed by RLNG (Re-gasified Liquefied Natural Gas) with Rs39.45 billion (27.8 percent), and RFO (Residual Fuel Oil) with Rs20.9 billion (14.7 percent).
Other sources received varying percentages, including natural gas generators with Rs13.5 billion (9.5 percent), nuclear with Rs11.42 billion (8 percent), combined cycled plants (RFO, HSD, and RLNG) with Rs4.25 billion (3 percent), hydel with Rs3.7 billion (2.6 percent), wind with Rs2.9 billion (2 percent), solar with Rs643 million (0.5 percent), and bagasse with Rs545 million (0.4 percent).
