Asad Umar chairs CCOE meeting

ISLAMABAD: A meeting of the Cabinet Committee on Energy (CCOE) was held under the chairmanship of Minister for Planning, Development and Special Initiatives Asad Umar here Friday.

The cabinet committee discussed a proposal of the Power Division for waiver of minimum 66 percent take-or-pay commitment in PPAs and GSAs of RLNG plants and firm gas commitment to be finalised based on the annual production plan of power sector.

The meeting was told that the previous government signed expensive LNG import contracts without any firm demand. This LNG was loaded on the PPAs of government-owned IPPs as take-or-pay commitment at 66 percent of the plant capacity. These plants have to be run at this capacity even if there are cheaper options available due to such contracts, thus making the electricity unaffordable.

Changing the contacts structure will not only make the electricity cheaper, but also significantly reduce the circular debt build-up in coming years.