IPPs Received Rs. 979 Billion in Capacity Payments During FY24

Independent Power Producers were paid over Rs. 979 billion in capacity charges in the fiscal year 2023-24, according to a report submitted by the Power Division to the National Assembly on Thursday. The Power Division has disclosed that from July 2023 to June 2024, over Rs. 979.29 billion was released to 33 IPPs as capacity payments. Of this amount, Rs. 718 billion went to eight IPPs generating electricity from local and imported coal. An amount of Rs. 72.63 billion was paid to 11 IPPs using local gas and LNG, while three hydropower-based IPPs received more than Rs. 106 billion. It was disclosed that 11 IPPs producing electricity from furnace oil were paid over Rs. 81.60 billion. It bears mentioning that the federal government is renegotiating contracts with these IPPs to reduce electricity rates across the country. Energy Minister Awais Leghari said last week that the current power pricing structure was no longer viable and that both the government and IPPs agree that the status quo cannot continue.