The government intends to save Rs4,743 billion (USD17 billion) by excluding 7,967MW of high-cost energy projects and adjusting project completion timelines under the upcoming Indicative Generation Capacity Expansion Plan (IGCEP) 2024-2034, the Prime Minister’s Office (PMO) said on Thursday.
According to a press release issued by the PMO, the decision was made during a meeting chaired by Prime Minister Shehbaz Sharif in Islamabad to discuss the reduction of electricity tariffs and implementing sustainable reforms in the energy sector, focusing on the IGCEP.
Under the IGCEP, the government aims to prioritise local resources and alternative energy sources like solar, nuclear, and hydropower over imported fuels, which is expected to save Pakistan several billion dollars in foreign exchange reserves.
The government also aims to gradually phase out capacity payments to power generation companies, added the statement.
During the meeting, PM Shehbaz noted that after a recent reduction of approximately Rs7.50 per unit in electricity rates, the government is committed to pursuing an effective strategy for sustainable energy sector reforms to provide further relief to the public.
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The prime minister directed relevant authorities to expedite the completion of key projects, including the Diamer Bhasha Dam, to ensure effective systems for energy production and water storage in the country.
“Any delay in the completion of energy projects is unacceptable,” he emphasised.
The prime minister also announced that a free market for electricity generation will be established in the near future. “The creation of this market will enable competitive power supply, leading to more sustainable electricity availability and further reduction in tariffs,” PM Shehbaz was quoted as saying in the statement.
During the meeting, the prime minister was briefed on ongoing reforms in the energy sector.
Upon the PM’s instruction, a re-evaluation of the IGCEP revealed that there was room for further improvement. The Task Force subsequently revised the plan to better align with ground realities and future needs.
The briefing added that for the next ten years, the IGCEP paves the way for power projects to be awarded through competitive bidding and electricity to be sold at the lowest possible price.
The meeting was attended by Minister for Power Sardar Awais Leghari, Minister for Economic Affairs Ahad Khan Cheema, Minister for Information Attaullah Tarar, Minister for Petroleum Ali Pervaiz Malik, and senior officials from relevant institutions.
