Cabinet okays deal with eight IPPs to cut power costs

The federal government on Tuesday approved settlement agreements with eight independent power producers (IPPs) running on bagasse, aiming to reduce electricity tariffs and save around Rs240 billion for the national exchequer. The decision was made during a federal cabinet meeting chaired by Prime Minister Shehbaz Sharif. The approval followed recommendations from the Ministry of Energy’s power division. The power plants agr­e­e­ing to revised production costs include DW Unit I, Unit II, RYK Mills, Chiniot Power, Hamza Sugar, Al-Moez Indus­tries, Thal Indus­tries and Chinar Industries. After the agreements’ approval, the Central Power Purchasing Age­ncy will seek approval from the National Elec­tric Power Regulatory Authority (Nepra) for tariff adjustments. The Prime Minister’s Office in a press release said these agreements are expected to reduce electricity prices for consumers and provide an estimated Rs238bn relief to the exchequer.