The capacity payments made to Independent Power Producers (IPPs) have drained the public’s resources. In the span of one year, the government did not purchase even a single unit of electricity, but instead made capacity payments of Rs1,929 billion. In total, Rs1,198 billion worth of electricity was purchased from IPPs, but Rs3,127 billion paid out.

As the outcry against IPPs has persistently grown, this shady deal is being exposed. The staggering statistics of the capacity payments made by the government to IPPs have come to light. Whether or not electricity is purchased, the payments have to be made, and the government has been doing so.

In the previous year, Rs1,198 billion worth of electricity was purchased from IPPs, but Rs3,127 billion were paid out. This means that Rs1,929 billion in capacity payments were made without any electricity being purchased.

The total payments made to IPPs revealed that 38% went towards production costs, while 62% was for capacity payments.

The royal assessment can be made from here that 85% of IPPs’ power generation is less than 50%, but 100% payments were made. Only the power plants with a zero percent plant factor were paid a capacity payment of Rs46.4 billion in one year.

The plants that were generously rewarded by the government include HUBCO, KAPCO, and HCPC, which have a zero percent plant factor. A plant with a 4% plant factor was paid over Rs7 billion, the 8% generation Nandipur plant was paid Rs15 billion, and plants generating 25% less than their capacity were paid Rs568 billion.

Similarly, plants generating 25% to 83% electricity were paid Rs1,314 billion, and the China Power Hub Generation Company was paid Rs 103 billion in capacity payments over 9 months.

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The Chinese company has not generated any electricity for 5 months, while its generation was only 18% for 4 months. Huaneng Shandong Ruyi Energy was paid Rs95 billion in capacity payments over 9 months, Port Qasim Electric Power Company was paid Rs83 billion, Punjab Thermal Power Private Company was paid Rs26 billion, and WAPDA Hydel was paid Rs76 billion in capacity payments. The closed Neelum Jhelum Hydropower Project was also awarded Rs 10 billion.