Pakistan Ends Power Purchase Agreements to Cut Costs

Pakistan's government has renegotiated power purchase agreements with several utilities, including the Hub Power Company, to cut costs and reduce electricity tariffs amid rising energy prices. Prime Minister Shehbaz Sharif announced that the agreement with five independent producers could save approximately 60 billion rupees ($216 million) annually, critical in securing a $7 billion bailout from the IMF. The Hub Power Company has agreed to end contracts early, originally set to expire in 2027, a decision made in the 'greater national interest' to alleviate financial burdens on consumers stemming from previous excess capacity issues. This move follows a series of protests against high electricity tariffs as the government deals with the fallout of years of fixed costs built into consumer bills. The government is also exploring debt reprofiling with China and implementing structural reforms in the power sector. Meanwhile, security measures are heightened for Chinese nationals during the upcoming SCO summit due to recent militant attacks.