Islamabad web Desk: In a major policy shift, Federal Minister for Energy, Awais Leghari, has announced that the government will no longer purchase additional electricity. This decision was shared with international development partners during a crucial meeting focused on power sector reforms.
Key Meeting with Global Stakeholders
The high-level discussion, led by World Bank Country Director Najy Benhassine, saw participation from representatives of the International Monetary Fund (IMF), Asian Development Bank (ADB), International Finance Corporation (IFC), KfW (Germany’s state-owned development bank), the German Embassy, Foreign, Commonwealth & Development Office (FCDO), United Nations Development Programme (UNDP), and the Asian Infrastructure Investment Bank (AIIB).
Transparent Negotiations with IPPs
During the meeting, Minister Awais Leghari emphasized that negotiations with Independent Power Producers (IPPs) are being conducted with complete transparency and fairness. He reassured stakeholders that IPPs have the option to either negotiate new terms, seek arbitration, or undergo a forensic audit.
Shift Towards Sustainable Energy Policies
The minister also briefed the delegation on key reforms, including the transition from the ‘Take or Pay’ model to the ‘Take and Pay’ system, aimed at optimizing electricity procurement. Additionally, the government is moving towards phasing out furnace oil-based power plants, a move expected to enhance energy efficiency and reduce environmental impact.
Addressing Circular Debt and Market Reforms
Outlining a long-term strategy, Leghari revealed that the government will present a roadmap for eliminating circular debt within the next five to eight years. He also highlighted the upcoming rationalization of net metering policies, ensuring a more balanced approach to distributed energy generation.
Furthermore, the minister emphasized the importance of lowering electricity tariffs to stimulate economic growth. He provided insights into the development of a wholesale electricity market, aimed at fostering competition and reducing costs for consumers.
International Support for Energy Reforms
The visiting delegation acknowledged Pakistan’s ongoing power sector reforms and assured continued support for the government’s initiatives. The meeting concluded with a shared commitment to enhancing energy sustainability, reducing financial burdens, and creating a more efficient power market.
With this strategic decision, the government aims to pave the way for a more stable and self-sufficient energy sector, prioritizing efficiency over expansion.
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