ISLAMABAD – The government’s task force on energy and 17 Independent Power Producers (IPPs) from the Power Policies of 1994 and 2002 have reached an agreement on a hybrid ‘take and pay’ model after over two weeks of extensive discussions in Rawalpindi. The task force, led by Minister for Power Sardar Awais Khan Leghari, includes key figures such as SAPM on Power Muhammad Ali, National Coordinator Lt. General Muhammad Zafar Iqbal, and experts from NEPRA, CPPA-G, and SECP.
The agreement, which aims to reduce tariffs by Rs 3.50 per unit, is expected to save up to Rs 200-300 billion. The revised Power Purchase Agreements (PPAs) and Implementation Agreements (IAs) will be submitted to the Cabinet for approval before being sent to NEPRA for tariff determination.
The IPPs involved in the negotiations include Uch-I Power Limited, Pakgen Power Limited, Liberty Power Daharki Ltd, Kohinoor Energy, Fauji Kabirwala Power Company Limited, Attock Gen Limited, Engro Power Gen Qadirpur Limited, Foundation Power (Daharki), Halmore Power Generation Company, Liberty Power Tech Limited, Hubco Narowal Energy Tech Limited, Nishat Chunian Power Limited, Nishat Power Limited, Orient Power Company, Saif Power Limited, Saphire Power Limited, New Bong Hydel IPP, and Uch-II Power Project.
Nishat Chunian Power Limited has formally informed the Pakistan Stock Exchange (PSX) that it has agreed to the ‘Hybrid Take and Pay’ model. The company’s Board of Directors approved amendments to the Power Purchase Agreement and Implementation Agreement, including changes to the indexation mechanism of O&M, rebasing of tariffs, and adjustments to the return on equity tariff component.
The government plans to start the next round of negotiations with GoP-owned power plants and renewable energy projects, both wind and solar. The expected reduction in tariffs from the revision of IPPs could reach Rs 6.50 per unit after re-profiling the debts of Chinese IPPs, pending Beijing’s agreement