ISLAMABAD: Federal Minister for Energy (Power Division) Sardar Awais Ahmad Khan Leghari informed the National Assembly that Pakistan currently operates 93 Independent Power Producers (IPPs) with a total power generation capacity of 22,671 MW. In response to MNA Muhammad Atif’s question, Minister Leghari outlined the breakdown, noting 50 IPPs are locally funded, 17 are foreign-funded, and 26 are funded through a mix of local and foreign investments.
Highlighting significant financial commitments, the minister disclosed that the government paid Rs428.435 billion in capacity payments during the 2023-24 fiscal year to four major IPPs: China Power Hub Generation Company (Rs137.035 billion), Huaneng Shandong Ruyi Energy (Rs113.707 billion), Port Qasim Electric Power Company (Rs120.373 billion), and Lucky Electric Power Company (Rs57.32 billion). These payments are required under existing Power Purchase Agreements, which allow IPPs to recover fixed costs based on plant availability for power generation.
The Minister further detailed a task force established by the Prime Minister, focusing on structural reforms to lower consumer electricity tariffs and reduce the sector’s financial burden on the government. Key stakeholders in IPPs include both local investors such as Lucky Cement Mills Limited and Gadoon Textile Limited, as well as foreign investors like Korea Water Resources Corporation, Shanghai Electric Dubai, and China Three Gorges South Asia Investment Limited.
In Balochistan, five commissioned IPPs collectively generate 3,742 MW, including projects like the Hub Power Project (1,292 MW) and the China Power/Hubco project (1,320 MW). Another 300 MW coal-based plant is anticipated in Gwadar by December 2024.
Addressing financial challenges, Minister Leghari acknowledged the government’s struggle to resolve the power sector’s circular debt, which stands at Rs2.3 trillion, while asserting efforts to curtail further increases.
Story by Naveed Butt
