Govt working to expand renewable energy share: NA Told

Parliamentary Secretary for Energy (Power Division) Aamir Talal Khan on Thursday informed the National Assembly that the government is working to increase the share of renewable energy in the national power mix as part of a broader strategy to ensure a more sustainable and cost-efficient electricity system

ISLAMABAD, (APP - UrduPoint / Pakistan Point News - 18th May, 2026) Parliamentary Secretary for Energy (Power Division) Aamir Talal Khan on Thursday informed the National Assembly that the government is working to increase the share of renewable energy in the national power mix as part of a broader strategy to ensure a more sustainable and cost-efficient electricity system.

Responding to a calling attention notice regarding non-termination of Independent Power Producers (IPPs) agreements, he said the transition toward renewable energy is already underway, with future power projects being directed toward solar, wind, and bagasse-based generation.

He added that the current focus is on improving the overall energy mix and reducing dependence on expensive generation sources.

The parliamentary secretary said the government has undertaken major reforms in the power sector, including a comprehensive review of agreements with Independent Power Producers (IPPs).

He said seven IPP contracts were terminated, while several others were renegotiated. The earlier “take-or-pay” model has been replaced with a “hybrid take-and-pay” arrangement to reduce financial pressure on the system.

<?php /*?> <?php */?>

He further said interest rates on late payments, previously set at KIBOR plus 4.5 percent, have been reduced to KIBOR plus 1 percent.

A banking consortium has also been formed to help address the issue of circular debt. Under these measures, payments worth billions of rupees have been made to IPPs.

Aamir Talal Khan said these reforms are expected to bring visible relief in electricity tariffs and improve the efficiency of the power sector.

Addressing concerns over the high cost of earlier power purchase agreements, he said such contracts were signed during periods of severe electricity shortages, particularly between 2008 and 2013, and later in 2015–16, when urgent capacity expansion was required.

He added that rising electricity costs are also linked to broader economic factors, including depreciation of the Pakistani rupee and inflation, which have increased the financial burden of long-term contracts. He said renegotiations have helped reduce tariffs and interest rates.

APP/zah-tsw