KARACHI – Historic power sector reforms paved the way for lower electricity bills as federal cabinet takes major steps to save Rs922 Billion.
The federal cabinet sheds light on proposals for revised agreements with 18 additional Independent Power Producers IPPs based on a total saving of Rs922 billion. These revised agreements, led by Federal Minister Sardar Awais Leghari, include negotiations with 14 IPPs to reduce their profits and costs by Rs802 billion.
Additionally, Rs85 billion in interest will be waived, and Rs35 billion will be deducted from the previous years’ additional profits. These approvals will result in a benefit of Rs922 billion for consumers in coming years.
Out of these IPPs, ten were generating electricity under the 2002 policy, while 4 were established under the 1994 power policy. Moreover, the agreement with one IPP under the 1994 policy has been canceled. To date, revised agreements have been made with a total of 28 IPPs, resulting in a total saving of Rs1457 billion, with an annual saving of Rs137 billion .
From July to November 2024, due to improved policies and performance in the power sector, the circular debt has decreased by Rs12 billion rupees, reaching Rs2381 billion, compared to Rs2393 billion on June 30, 2024. In same period of 2023, the circular debt increased by Rs368 billion, but in 2024, it witnessed cut by Rs12 billion, showing an improvement of Rs380 billion that, if appropriate measures had not been taken, would have contributed to the circular debt.
During July-November 2024 period, losses from distribution companies due to low recovery and other factors amounted to Rs170 billion, compared to Rs223 billion rupees during the same period in 2023, showing an improvement of Rs53 billion.
In the past seven months, the national average electricity price has been reduced by Rs4.64 per unit, demonstrating that despite the reduction in electricity prices, recovery and losses have been improved.
