New pacts with 18 IPPs likely in six months

The government on Tuesday put on record that it had reached an agreement with bagasse-based power plants for tariff cuts and would take four to six months to revise power purchase agreements (PPAs) with 18 other independent power producers (IPPs) set up under 1994 and 2002 power policies. With the approval of the federal cabinet last month, Power Minister Owais Khan Leghari announced the pre-mature termination of PPAs with the five oldest IPPs, with annual savings of Rs70 billion (71 paise per unit) or around Rs411bn over the remaining term of their contracts. However, testifying before the Senate Standing Committee on Power, Prime Minister’s Special Assistant Muhammad Ali, who is also a member of the task force on renegotiations with IPPs, said the savings out of those five oldest IPPs would be around Rs60bn per annum. Senator Mohsin Aziz presided over the meeting of the committee.