Independent power producer programme, and its erosion
Through the Private Power and Infrastructure Board, Pakistan's government commissioned 101 private power plants with 25,841 MW of capacity under long-term purchase contracts, and by March 2025 only 88 plants with 20,726 MW still operated, after the government terminated the purchase agreements of six of them, Hub, Lalpir, Pakgen, Roush, Saba and Atlas, with effect from 1 October 2024.
20,726 MW, capacity of operational ppib-facilitated ipps, 2025-03. 25,841 MW, cumulative capacity of ipps commissioned through ppib, 2025-03. Finance Division, Government of Pakistan, Pakistan Economic Survey 2024-25, chapter 14 Energy, retrieved 2026-10-17.
The move, and what it needed
The federal government let private firms build and own power plants and bought their output under long-term purchase agreements with sovereign guarantees issued through PPIB, which closed the shortage, then made the state liable for capacity payments it could not afford and led it to terminate the oldest contracts.
Preconditions
- A sovereign guarantee that private lenders would accept
- A single public buyer able to sign take-or-pay contracts
- Demand forecasts that the contracted capacity later outran
Limits: Both numbers sit in one PDF and are read from its text, with PPIB as the underlying source. The 25,841 MW is cumulative capacity ever commissioned, not a published peak of capacity operating at one time, so the 5,115 MW gap overstates the loss: some of the 13 plants that no longer operate left at the scheduled end of their contracts, and the survey does not split expiries from terminations. The survey ties the six terminations to a fall in installed thermal capacity from 28,766 MW in FY 2024 to 25,937 MW in March 2025, and it calls them a deliberate removal of costly and underutilized thermal contracts, so a reader can also see this as a buyer ending contracts it no longer needed rather than a loss of collaboration capacity. The same chapter shows the programme still adding plants, among them the 884 MW Suki Kinari hydropower project. The record does not show the price of capacity payments that drove the terminations, the settlement terms, or the later renegotiation of other contracts, none of which appear at this URL. The survey does not state the 1994 start or how close the terminated contracts were to their end: Dawn reported that four of the plants were set up under the 1994 power policy, Hub Power before it, and that their contracts were set to expire within two to three years, which makes the early loss smaller than the termination suggests.