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Govt deals with 18 IPPs expected on new terms

Islamabad (TDI): The government is poised to strike a deal with 18 IPPs for “take and pay” mode for electricity purchase, The News reported on Monday.

Few weeks back five Independent Power Producers (IPPs) initiated the termination of their contracts in light of outcry over the inflated power bills.

“The government would pay the said 18 IPPs in the shape of cash or T-bills the past dues in the head of energy charges and capacity payments but they would not be paid interest payments,” the paper quoted the power sector industry and government officials saying as.

The said IPPs have the cumulative capacity to generate electricity of 4,267 megawatts and were set up under 1994 and 2002 power policies.

Read More: IPPs update Military Leaders on Power Sector issues

It is expected that the decision could save around Rs70 to Rs100 billion per year amid prevailing various challenges faced by the country on the economic front.

The government would pay only against the actual electricity dispatch under “take and pay” mode and IPPs would not be paid capacity payments at all, the report adds.

The government has assured the IPPs that it would also pay the annual expenditures enough to keep the power plants afloat to ensure their existence in the system.

Earlier reports suggested that the government decided to be out of the electric power business.

The powerhouses owned by the government generating 52% of electricity would also be shifted to take-and-pay mode, the paper further said.

“The electricity would be purchased from government power plants based on take-and-pay mode. The payment would be made only for electricity to be purchased. Return on Equity is to be paid on a take-and-pay basis,” the paper said while quoting an official.

Also Read: 10 IPPs Demand Contract Terminations Over Unfair Terms

The 18 IPPs that would operate under new mode are Uch-I Power Limited of 586 MWs, Pakgen Power Limited of 365 MWs, Liberty Power Daharki Ltd 235 MWs, Kohinoor Energy 131 MWs, Fauji Kabirwala Power Company Limited 157 MWs, Attock Gen Limited (165 MWs), Engro Power Gen Qadirpur Limited 227 MWs, Foundation Power (Daharki) of 185 MWs, Halmore Power Generation Company 225 MWs, Liberty Power Tech Limited 200 MWs, Liberty Power Tech Limited 225 MWs, Narowal Energy Tech Limited 220 MWs, Nishat Chunian Power Limited 200 MWs, Nishat Power Limited 200 MWs, Orient Power Company 229 MWs, Saif Power Limited 229 MWs, Laraib Energy Limited 84 MWs and Uch-II Power Project of 404 MWs.

The government would continue to purchase electricity from the 18 IPPs under the take-and-pay mode until the private power market is established.

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