By Urdu Report Editorial Team
The government has been claiming that it is moving away from independent power producers (IPPs), but reports have revealed that new agreements lasting 30 and 40 years have been signed with some power plants.
According to a media report, details have emerged regarding the duration and validity of agreements with various IPPs, while the current government also signed new agreements with four IPPs in 2025.
30-Year Agreement Signed with Jamshoro Coal Power Plant
According to the report, the government signed a 30-year agreement with the Jamshoro Coal power plant on July 30, 2025.
Documents from the Ministry of Energy show that between 2015 and 2024, 37 IPPs were paid Rs 3.452 trillion in capacity payments over and above electricity generation charges during the 10-year period.
IPPs Received Trillions of Rupees in Capacity Payments
According to the documents, the IPPs received Rs 979 billion in capacity payments during the fiscal year 2023-24 alone.
The 37 IPPs received Rs 655 billion in capacity charges in fiscal year 2023, Rs 336 billion in 2022, Rs 365 billion in 2021, Rs 355 billion in 2020, Rs 234 billion in 2019, Rs 169 billion in 2018, Rs 121 billion in 2017, Rs 118 billion in 2016 and Rs 117 billion in 2015.
The documents show that some agreements with IPPs remain effective until 2057, meaning payments to certain companies could continue for several more decades.
Details of IPP Owners and Capacity Payments
Abdul Razak Dawood, a former adviser to former Prime Minister Imran Khan and a member of General Pervez Musharraf’s cabinet from 1999 to 2002, owns the IPP Rousch Pakistan Power Limited. The company received Rs 60.03 billion in capacity charges over the past 10 years.
Nadeem Babar, who served as special assistant to Imran Khan on petroleum, owns two IPPs. His company, Saba Power Company (Private) Limited, was issued a licence on August 26, 2003, and received Rs 17.24 billion in capacity charges over the past 10 years.
Nadeem Babar is also a partner in the Mahmood Group’s Orient Power Project. The company was issued a licence on July 22, 2005, and signed an agreement to generate 229 megawatts of electricity until August 31, 2032. It received Rs 39 billion in capacity charges over the past 10 years.
Mansha Group IPPs Received Billions in Payments
Businessman Mian Mansha’s Mansha Group owns four IPPs that collectively received Rs 181.43 billion in capacity charges over the past 10 years.
Mansha Group’s AES Lalpir Private Limited was issued a licence on August 26, 2003, and signed an agreement to generate 362 megawatts of electricity until August 25, 2027. The company received Rs 49.38 billion in capacity charges over the past 10 years.
AES Pak Generation Private Company was also issued a licence on August 26, 2003, and signed an agreement to generate 365 megawatts of electricity until August 25, 2026. The company received Rs 50.83 billion in capacity charges over the past 10 years.
Mansha Group’s Nishat Chunian Power Project was issued a licence on September 6, 2007, and signed an agreement to generate 200 megawatts of electricity until June 29, 2035. The company received Rs 41.42 billion in capacity charges over the past 10 years.
Nishat Power Project was also issued a licence on September 6, 2007, and signed an agreement to generate 200 megawatts of electricity until December 30, 2034. The company received Rs 39.80 billion in capacity charges over the past 10 years.
Chinese IPPs Also Received Heavy Capacity Payments
China Power Hub Generation Company Private Limited received Rs 100.37 billion in capacity charges during fiscal year 2023-24, compared with Rs 100.18 billion in fiscal year 2022-23.
Another Chinese IPP, Huang Shandong Rui Energy Private Limited, received Rs 100.13 billion in capacity charges during fiscal year 2023-24, compared with Rs 100.02 billion in fiscal year 2022-23.
The Coal Block 1 Power Generation Company Private Limited received Rs 100.59 billion in capacity charges during fiscal year 2023-24, compared with Rs 180 million in fiscal year 2022-23.
Port Qasim Electric Power Company Private Limited received Rs 100.20 billion in capacity charges during the last fiscal year, compared with Rs 770 million in fiscal year 2022-23.
Long-term agreements with IPPs and the heavy payments made under capacity charges have continued to raise questions about electricity prices and the financial burden on consumers. The government, meanwhile, has said it is reviewing IPP agreements and taking steps to reduce the cost of electricity.
