A detailed proposal has been floated before the International Monitory Fund, IMF, for an exemption to cut the price of electricity by Rs 6 per unit. Its purpose is to provide relief to the consumers from the enhanced electricity prices. Sources in Power Division said the proposed plan to the tune of Rs. 2800 billion is a combined funding effort by both the federal and provincial governments. The remaining funds will be obtained from the four province governments on the basis of National Finance Commission NFC Award while the federal government’s share will be Rs. 1400 billion.
Of this amount, Punjab is expected to pay Rs699 billion, Sindh Rs351 billion, Khyber Pakhtunkhwa Rs231 billion, and Balochistan Rs119 billion. These are the provinces’ respective shares. The main uses of these funds are for the settling of unsettled contracts with the IPPs, closure of less efficient power plants, and the repayment of local loans linked to specific power plants.
The plan proposes the cancellation or renegotiation of contracts with the IPPs to ease the financial burden. Similarly, this shall further reduce the selling price of electricity by Rs1.15 per unit on account of lower profit margins of the government-owned power plants. It is likely that another Rs2.83 would be shaved off every unit price once the Rs2300 billion circular debt is cleared.
This will reduce the price of electricity for consumers throughout the country, and the federal government is currently waiting for a green light from the IMF to implement it.
