Pakistan paid around $12 billion to Independent Power Producers (IPPs) over an 11-month period, highlighting the significant financial burden of the power sector on the country’s economy.
The amount is comparable to the financing Pakistan secured from IMF over a period of three years. The figures have renewed attention on the cost of power generation and the government’s long-standing challenges in managing the energy sector.
Payments to IPPs remain closely linked to discussions surrounding electricity tariffs, circular debt and power-sector reforms. The scale of the payments has also raised questions about the sustainability of the existing power generation model.
Pakistan continues to face pressure to bring down electricity costs while ensuring sufficient power generation and addressing financial challenges within the energy sector.
The comparison with IMF financing highlights the size of the payments made to IPPs and their impact on the country’s finances.
The government has been pursuing reforms aimed at improving the efficiency of the power sector and reducing the financial pressures contributing to higher electricity costs.
The latest figures are expected to add further focus to efforts to reform power generation agreements, control sector losses and develop a more financially sustainable energy system.
