Pakistan’s government has revised several electricity purchase agreements to reduce financial pressure on the power sector. The Economic Coordination Committee approved the decision during a meeting chaired by Muhammad Aurangzeb. Officials say the new agreements could save about Rs163 billion over the remaining life of the contracts.
The changes apply to agreements with 15 power plants, including 14 wind power projects and the Quaid-e-Azam Solar Power Plant. The government also ended the contract of one small power producer and modified agreements with other plants to lower future costs.
Officials explained that the move came after negotiations between the government and electricity producers. The aim is to reduce power generation costs, improve payment arrangements, and manage outstanding financial liabilities in the sector.
Pakistan’s power sector has struggled with rising circular debt and high capacity payments for many years. By revising these agreements, the government hopes to reduce the burden on public finances and eventually ease pressure on electricity tariffs paid by consumers.
The plan also includes waiving late payment charges for government owned power plants for another year. This step is expected to help clear about Rs235 billion in outstanding dues owed to these plants.
Energy experts say such reforms are important for improving the financial stability of Pakistan’s power sector. They believe better contract terms and lower tariffs can help control electricity costs while supporting long term energy reforms.
Financial Figures
| Item | Amount / Detail |
|---|---|
| Total projected savings | Rs163 billion |
| Power plants covered | 15 |
| Wind power plants | 14 |
| Solar project included | Quaid-e-Azam Solar Power Plant |
| Outstanding dues targeted | Rs235 billion |