The Federal Cabinet has approved revised agreements with 14 Independent Power Producers (IPPs). The meeting, chaired by Prime Minister Shehbaz Sharif in Islamabad, endorsed a proposal to cut the profit and costs of these IPPs by 802 billion rupees.
A deduction of 35 billion rupees will be made from the additional profits earned by IPPs in previous years. This move aims to bring financial relief to the national exchequer.
Government to Save 1.4 Trillion Rupees
The revised agreements are expected to save the government 1.4 trillion rupees. This financial adjustment will help tackle issues like circular debt and high electricity prices.
Prime Minister Shehbaz Sharif highlighted the significance of the agreements. He said the revised deals will ease the financial burden on the government. The adjustments will also result in lower electricity costs for consumers.
The cabinet also approved structural changes within federal ministries. The Anti-Narcotics Division will now merge with the Ministry of Interior. Similarly, the Aviation Division will integrate into the Ministry of Defense.
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Focus on Financial Stability
The government’s decisions aim to promote fiscal stability and streamline administrative functions. These changes reflect efforts to manage resources efficiently and address long-standing financial challenges.
Impact on Electricity Prices
Reducing the costs associated with IPPs is expected to stabilize electricity tariffs. The government hopes this will provide much-needed relief to businesses and households struggling with high energy costs.
The Prime Minister assured that these measures will help eliminate circular debt. The government is committed to long-term solutions for the energy sector’s financial issues.
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