The investigation into Independent Power Producers (IPPs) is reaching its final stages as nearly half a dozen owners from these companies have been summoned to Islamabad for questioning. The government, led by Prime Minister Shahbaz Sharif, is employing influential-driven methods to exert pressure on IPPs, similar to those used by the previous administration. IPP owners are being urged to agree to revised contract terms, citing substantial amounts of money received, both legally and otherwise. However, this approach has raised concerns among energy sector investors who fear that it may discourage foreign investment for years to come.

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A senior official has highlighted that shutting down IPPs from the 1994 and 2002 policies would lead to minimal potential savings, adding that inefficiencies in the transmission and distribution system and under-recovery by DISCOs are major factors driving up energy costs. The government’s push to renegotiate IPP contracts is seen as more about catering to specific interest groups and enhancing the government’s image rather than providing tangible benefits to the public.

The government’s team is hopeful that it may succeed in extracting some monetary concessions from the IPPs that it can then claim as a significant success.