Cabinet body to approve Rs 403b payment to IPPs

Aftab Ahmed

The Cabinet Committee on Energy is set to accord approval of paying Rs 403 billion to Independent Power Producers (IPPs).

A meeting held on Monday will approve Payment Mechanism and Agreements with Independent Producers –IPPs.

The Government of Pakistan constituted a Committee in August 2019 to look into the Power Sector issues. The issues include purportedly higher profits made by the IPPs. It also recommends a way forward for the issue.

https://newztodays.com/hefty-profitsinquiry-commission-initiates-probe-against-ipps/

The Committee presented its report in March 2020, highlight issues faced across the Power Sector.

In pursuance of these recommendations and the decision of the Cabinet Committee on Energy, the Federal Government constituted another Negotiation Committee to negotiate with the IPPs. Following successive rounds of discussion with the IPPs and other Power Sector stakeholders, the Negotiation Committee recommended signing Memoranda of Understanding (MoUs) with 47 IPPs.

The Negotiation Committee submitted its complete report to CCoE, which approved another Committee (Implementation Committee) constitution on 24 September 2020. Its mandate was to ensure the implementation of the MoUs and the recommendations in the report.

Subsequently, the CCoE also gave explicit approval of the MoUs and cabinet ratified on December 1, 2020. The Implementation Committee conducted various sessions with IPPs on payment mechanisms. This will clear their outstanding payables and convert the MOUs into agreements.