Islamabad: In a significant move toward reforming Pakistan’s struggling power sector, the Federal Cabinet has approved the termination of existing Power Purchase Agreements (PPAs) with five Independent Power Producers (IPPs). The decision follows recommendations by the Task Force on Power Sector Reforms.
According to a statement from the Prime Minister’s Office, the affected IPPs include HUBCO, Lalpir Power Limited, Saba Power, Rousch Power, and Atlas Power. Rousch Power, originally established under a Build-Operate-Transfer (BOT) agreement, will be transferred to government ownership and later privatized. The other four IPPs will retain ownership, with no further payments from the government following the termination of their agreements.
This move is expected to save the national treasury Rs411 billion and reduce per-unit electricity costs, benefiting consumers by Rs60 billion annually. The Prime Minister expressed optimism, stating that the national economy is moving toward stability, and this initiative marks the first phase of reducing tariffs through revised agreements with IPPs.
The share prices of HUBCO and Lalpir Power fell in response to the news, reflecting market uncertainty.
The government praised the five IPP owners for prioritizing national interest over personal gain, marking the termination as a crucial step in providing public relief.
