IPP Owners Warned to Revise Power Purchase Agreements or Face Consequences

Islamabad: The Task Force on Independent Power Producers (IPPs) has concluded its review, warning several IPP owners to voluntarily revise their Power Purchase Agreements (PPAs) or face serious consequences, ARY News reported on Tuesday, citing sources.

According to details, owners of four IPPs established under the 1994 policy and another under the 2002 policy have been urged to terminate their existing PPAs. The task force has recommended ending capacity charge payments, advising that IPPs should only charge for the electricity they supply to the government.

Sources further revealed that IPP owners have been cautioned that if they refuse to renegotiate the terms of their PPAs, they could face a forensic audit into their operations.

The government had earlier raised concerns about the detrimental impact of some IPPs on the national economy, alleging that several producers received billions of rupees without generating electricity, due to flawed contracts. These deals have placed a significant financial burden on Pakistan.

Officials also disclosed that some IPPs charged Pakistan four times the cost for wind power plants compared to similar facilities in Bangladesh and Vietnam. Additionally, there are accusations of over-invoicing in several of these contracts.

The government is now pushing for transparency and reform in the energy sector to address these financial irregularities and alleviate the strain on the economy.