Pakistan’s largest private utility, Hub Power Company Ltd, announced on Thursday the early termination of an IPP contract for the government to purchase power from one of its generation projects.
This decision follows Power Minister Awais Leghari’s comments to Reuters last month, stating that the government is renegotiating agreements with independent power producers (IPPs) to control electricity tariffs as households and businesses struggle with rising energy costs.
The government and the Central Power Purchasing Agency (CPPAG) have agreed to settle the company’s outstanding receivables up to October 1, according to a notice sent to the Pakistan Stock Exchange.
The company reported that its board approved an accelerated expiry date of October 1 for the contract, changing it from the original date of March 2027, describing the action as being taken “in the greater national interest.”
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Additionally, the government has reached an agreement with five IPPs to reassess their purchase contracts, a move that Prime Minister Shehbaz Sharif stated will save the country Rs60 billion ($216.10 million) annually. While chairing a federal cabinet meeting in Islamabad, PM Shehbaz remarked, “Five IPPs, with mutual consent and prioritizing national interests over personal, […] have reached an agreement on power purchase contracts.”
