ISLAMABAD: Pakistan’s annual payments to Independent Power Producers (IPPs) have surged to Rs3.4 trillion, officials revealed during a meeting of the Senate Standing Committee on Cabinet Secretariat on Tuesday.
Officials from the National Electric Power Regulatory Authority (NEPRA) informed the committee that the government pays approximately Rs3.4 trillion annually to IPPs.
According to NEPRA officials, the average electricity tariff currently stands at Rs36 per unit, of which nearly Rs18 per unit is charged in the form of capacity payments.
The Director General Tariff at NEPRA further disclosed that annual capacity payments to IPPs range between Rs1.8 trillion and Rs2 trillion, while energy payments amount to an additional Rs700 billion to Rs800 billion every year.
Members of the standing committee expressed serious concerns over the massive payments being made to power producers and sought a detailed report on all energy and capacity payments made to IPPs.
In response, the DG Tariff stated that final payments to IPPs are made by the Central Power Purchasing Agency (CPPA), adding that only the CPPA can provide complete data regarding energy and capacity payments.
During the meeting, Senator Abdul Qadir stated that, in addition to capacity payments, the government also provides subsidies worth around Rs1.2 trillion to IPPs.
Criticizing the ongoing payment mechanism, he remarked that the government continues to make the payments to IPPs without meaningful reforms.
Meanwhile, Jamaat-e-Islami (JI) Pakistan chief Hafiz Naeem ur Rehman has announced a major protest in Islamabad on May 15 against rising inflation and the recent increase in petrol prices.
Addressing a press conference in Islamabad, Hafiz Naeem criticized the government over soaring inflation, rising fuel prices, economic instability, and poor governance.
Speaking about Independent Power Producers (IPPs), he said the government had renegotiated agreements with only 15 out of 100 IPPs, while it was waiting for the remaining contracts to expire. He alleged that authorities are likely to extend some agreements to protect corrupt interests.
