Islamabad, Oct 16: Govt Readies Stricter Power Purchase Agreements for 18 IPPs
Notices are due next week. The federal government is finalizing four new alternatives to convert 18 Independent Power Producers (IPPs) from a “take or pay” approach to a “take and pay” model.
The potential contract modifications have been communicated to these IPPs, according to Business Recorder.
The 4,267 MW total capacity of these IPPs has been suspended by the Central Power Purchasing Agency (CPPA).
In an effort to address Pakistan’s ongoing electricity sector problem, a few IPPs have indicated that they might be open to amending their contracts.
Some have objected, citing the necessity of fair discussions to prevent discouraging further investment. After agreeing to pay five IPPs around Rs. 72 billion in capacity payments, the government hopes to close deals and put an end to the matter quickly.
The updated agreements might contribute to the electricity sector’s stabilization and future investment sustainability. It’s unclear, though, if these changes would result in lower electricity prices for the final user.
