ISLAMABAD – The Federal cabinet has approved revised agreements with 14 Independent Power Producers (IPPs), a development that will help reduce electricity cost in Pakistan.
Prime Minister Shehbaz Sharif chaired the cabinet meeting when it approved a proposal to reduce the profit and cost of these IPPs by Rs802 billion.
A deduction of Rs35 billion will be made from the additional profits of these IPPs over the past years, state broadcaster reported.
Under the revised agreements with IPPs, the government will get the benefit of Rs1.4 trillion.
Speaking on the occasion, the Prime Minister said the revised agreements with IPPs will not only save the national exchequer, and eliminate circular debt but also reduce electricity prices.
Earlier this month, Minister for Power Sardar Awais Ahmad Khan Leghari said the government has saved Rs1.1 trillion through negotiations with IPPs.
The minister said the government and IPPs mutually renewed the contracts in the interest of Pakistan.
He pointed out that people can no longer afford to pay the higher electricity bills and the government is going to revamp the entire power sector.
The Minister further said production of least cost electricity is the only consideration of the government.
He said renewable energy is the way forward to generate the least cost electricity in the country.
Leghari said that the government is also reviewing various taxes included in electricity bills to provide maximum relief to the consumers.
