Prime Minister Shehbaz Sharif announced on Thursday that the federal government will terminate contracts with five independent power producers (IPPs) in a move aimed at providing relief to citizens facing high inflation.
This decision follows public outcry over skyrocketing electricity bills, prompting the Shehbaz administration to reevaluate agreements with IPPs, which have contributed to rising capacity payment charges.
“Consumers will save Rs60 billion annually, and the national treasury will gain Rs411 billion. These five IPPs have prioritized the nation’s interests over their own, and the ‘take and pay’ system has been eliminated for them,” the prime minister stated during a cabinet meeting.
He added that tariffs would be reduced by gradually revising contracts with other IPPs in the power sector.
PM Shehbaz noted a significant drop in inflation, from over 30% in the same month last year to 6.9% currently. He praised the five IPPs for their efforts, comparing their impact to the first drop of rain that brings relief to the public.
