Special Assistant to the Prime Minister on Power, Muhammad Ali, informed the Senate Standing Committee on Power on Tuesday that negotiations with Independent Power Producers (IPPs) are nearing completion. However, he noted that an additional three months will be required to finalize these discussions, with the anticipated financial benefits to the public—estimated between Rs. 200-300 billion—expected to materialize in approximately six months.

During the committee meeting, members expressed concerns about the impact of the dollar exchange rate on the cost of imported coal, which is used in Bagasse-powered IPPs. Muhammad Ali acknowledged the challenges in setting prices for Bagasse Energy due to the volatility of coal prices.

In his address, Muhammad Ali also highlighted the government’s previous efforts to reduce electricity costs, referencing a 2019 study that led to a 2020 report advocating significant changes in IPP policies. Under the 1994 policy, IPPs were granted upfront tariffs, while the 2002 policy offered equity returns, resulting in IPP profits increasing by over 27 percent.

The committee urged the government to swiftly implement the Task Force’s recommendations and expedite the completion of negotiations with the IPPs to ensure timely benefits to the public.