ISLAMABAD (Azaad English): The federal government on Monday announced its ambitious plan to reduce the high costs of electricity in an attempt to provide relief to the public.
According to details, the government is trying to reduce electricity prices by Rs 6 to Rs 8 per unit in the next two months. For this purpose, the government is in talks with banks to obtain loans of Rs 1,300 billion.
Reportedly, this loan will be taken at a fixed rate and for a specific period, which will help eliminate the circular debt of the power sector.
According to officials, the government has already saved Rs 700 billion through negotiations with IPPs (IPPs) and eliminated interest of Rs 300 billion.
In addition, the contracts of 6 IPPs have been terminated, while negotiations on ‘take and pay’ agreements with 25 IPPs have been completed.
The government is also continuing negotiations with government power plants. Through these measures, the government aims to significantly reduce electricity prices in the next two months.
According to officials, the power sector’s circular debt is about Rs 2,300 billion, and all efforts are being made to reduce it to zero as soon as possible.
During the Senate Standing Committee on Power chaired by Senator Mohsin Aziz, Advisor to the Prime Minister Muhammad Ali disclosed that the government is paying some IPPs in foreign currency, saying: “Our efforts are to bring these IPPs to return in local currency.”
“60 to 70 billion rupees were being paid to the IPPs that were terminated. We were paying these 6 IPPs in dollars. We fixed the payment to the IPPs at the rate of 168 rupees per dollar,” he further added
