Power Minister Awais Leghari announced that the federal government is reevaluating the terms of Chinese independent power producers (IPPs) in terms of debt reprofiling and coal sourcing. This move comes after Islamabad requested Beijing to convert imported coal-based projects to local coal and re-profile over $15 billion in energy sector liabilities to create fiscal space. Finance Minister Muhammad Aurangzeb stated that discussions have taken place regarding converting Chinese power projects to local coal and advancing their technical, logistical, and financial parameters.
Leghari emphasized the benefits of transitioning to local coal, including reducing pressure on foreign exchange reserves, making dividend repatriation easier, and improving returns in dollar terms. This transition could potentially save Pakistan over Rs200bn annually in imports, leading to a decrease of up to Rs2.5 per unit in electricity prices.
Furthermore, Leghari highlighted the ongoing review of IPP contracts with China, focusing on debt reprofiling and transitioning to local coal resources to reduce costs in the energy sector. This collaborative effort aims to optimize energy generation and enhance the overall landscape of the power sector.
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