Pakistan to Pay Rs 2,091 Billion in Capacity Payments to Power Producers

The Government of Pakistan has estimated that capacity payments to Independent Power Producers (IPPs) will total Rs 2,091 billion for the current fiscal year. According to official documents, the largest share of these payments is allocated to nuclear power plants, amounting to Rs 465.7 billion.

Hydropower plants are projected to receive Rs 446.4 billion in capacity payments, while imported coal power plants are expected to require Rs 395.4 billion. The capacity payments for Thar coal power plants are estimated at Rs 256 billion, and LNG power plants are projected to receive Rs 168 billion.

Other power sources are also included in these estimates: wind power plants are anticipated to receive Rs 168 billion, furnace oil power plants Rs 81.33 billion, gas power plants Rs 61.21 billion, and solar power plants Rs 41.63 billion. Additionally, bagasse-based power plants, which utilize sugarcane residue, are expected to require Rs 6.9 billion.

Capacity payments are made to power-producing companies to maintain their capacity to generate electricity, ensuring they can meet any additional demand. Notably, these payments are made in US dollars, not Pakistani rupees, reflecting the international agreements and financial structures underpinning Pakistan’s energy sector.