The federal government has received a proposal to reduce electricity rates by Rs. 5 per unit for all consumers. This plan involves a lump sum payment of Rs. 4 trillion to Independent Power Producers (IPPs), according to high-level sources.
The Ministries of Finance and Energy have suggested consolidating and paying the capacity payments due in the next 3-5 years to IPPs in advance. This approach aims to reduce the power tariff by at least Rs. 5 per unit, ease the IPPs’ payment burden, and address revolving credit issues by pooling funds for these advance payments.
The proposal outlines that the Finance Division would arrange the necessary financing and transfer the funds to the Ministry of Energy for disbursement to IPPs. However, approval from the International Monetary Fund (IMF) is required before proceeding.
Prime Minister Shehbaz Sharif has been briefed on the proposals, but no final decision has been made yet. Officials from the Finance and Energy ministries have been working together to develop a viable plan to reduce power bills as a priority.
