Recent data reveals substantial payments made to Independent Power Producers (IPPs) in Pakistan, spotlighting billions of rupees from public coffers to private investors involved in the power sector over the last decade.
These financial commitments to IPPs stem from contracts slated to persist until 2057, ensuring ongoing annual payments for the next 33 years. From 2015 to 2024, 37 IPPs in Pakistan received a cumulative total of 3.452 trillion rupees in capacity payments, over and above the charges for electricity supplied.
Read: Water and Power Secretary Refuses to Disclose IPP Agreements
A breakdown of recent fiscal years illustrates a significant escalation in these payments: In the last fiscal year alone, IPPs were paid 979 billion rupees in capacity charges. This figure compares with 655 billion rupees in fiscal year 2023, 336 billion in 2022, 365 billion in 2021, and 355 billion in 2020.
Read: Government to Shift IPP Payment Burdens to Public Amid Inflation
Looking further back, capacity payments to IPPs were 234 billion rupees in 2019, 169 billion in 2018, 121 billion in 2017, 118 billion in 2016, and 11.7 billion rupees in 2015. This escalating trend underscores the growing financial burden placed on the public in support of private power infrastructure investments.
