Pakistan to pay Rs2,091 billion in capacity payments to IPPs in FY2024-25

The Government of Pakistan has estimated capacity payments to IPPs amounting to Rs 2,091 billion for the current fiscal year, ARY News reported on Thursday, citing sources.

According to official documents, the highest capacity payments are estimated for nuclear plants at Rs 465.7 billion.

The capacity payments for hydropower plants are estimated at Rs 446.4 billion, while imported coal power plants are expected to require Rs 395.4 billion.

The Thar coal power plants are estimated to need Rs 256 billion in capacity payments, and LNG power plants are projected at Rs 168 billion.

Wind power plants are estimated to require Rs 168 billion in capacity payments, and furnace oil power plants are projected at Rs 81.33 billion.

For gas power plants, the capacity payments are estimated at Rs 61.21 billion, while solar power plants are projected at Rs 41.63 billion.

Finally, the capacity payments for bagasse-based (sugarcane residue) power plants are estimated at Rs 6.9 billion.

Capacity payment refers to the payment made monthly by consumers to the power-producing company to maintain its capacity to generate electricity, ensuring that additional demand can be met.

Notably, these capacity payments to IPPs are made in US dollars, not Pakistani rupees.

Former caretaker commerce minister Gohar Ejaz has been raising awareness through his statements and social media posts about the government’s mistakes and how these mistakes, if not corrected, will deteriorate the country’s economic conditions further.