The federal government has entered into fresh long-term agreements with Independent Power Producers (IPPs), extending some contracts to as long as 40 years, even as it publicly maintains that it is working to reduce the dependence on such arrangements.
According to details that have surfaced, the government signed new agreements with four IPPs during 2025 alone. Among them, a 30-year contract was finalised with the Jamshoro Coal power plant on July 30, 2025, locking in the plant’s operations for three decades.
The move stands in contrast to repeated government statements over the past year pledging to renegotiate or wind down costly IPP contracts, which have long been blamed for driving up capacity payments and inflating electricity tariffs for consumers.
Successive governments have faced pressure from independent economists, IMF reviews, and the public to curb these payments, many of which are made regardless of how much power is actually generated.
The emergence of new multi-decade agreements, rather than a reduction in the number of active contracts, raises questions about the consistency of the government’s IPP policy and whether its stated reform agenda is being implemented in practice.
Further details on the identities of the other three IPPs involved in the 2025 agreements, along with the specific terms of the 40-year contracts referenced, are still emerging.
