Govt Likely To Make Payments To IPPs In One Go

Sources say a final decision regarding this proposal will be made after consultations with the International Monetary Fund (IMF)

ISLAMABAD: (UrduPoint/UrduPoint / Pakistan Point News-August 3^rd, 2024) The Federal government is likely to make payments to the Independent Power Producers (IPPs) in one go to provide relief to the electricity consumers, the sources close to the development said on Saturday.

The sources said that the Finance Ministry, along with the Energy Ministry, put forward recommendations to tackle the growing challenges posed by the significant circular debt within the energy sector.

They said that the suggested a one-time disbursement of Rs4 trillion to the Independent Power Producers (IPPs) for capacity charges, with the goal of easing the strain on dissatisfied electricity consumers.

However, the sources said that a final decision regarding this proposal will be made after consultations with the International Monetary Fund (IMF).

This approach, involving a lump-sum payment to the IPPs, aims to alleviate the ongoing circular debt crisis. The payments may be distributed over a period of three to five years, potentially leading to a decrease in electricity rates by Rs5 per unit.

The responsibility for arranging the necessary funding for this considerable payment to the IPPs has been assigned to the Finance Ministry.