Energy Crisis & High Prices in Pakistan I IPPs, Capacity Payments & Overbilling скачать в хорошем качестве

Energy Crisis & High Prices in Pakistan I IPPs, Capacity Payments & Overbilling

In Pakistan, the energy sector’s vitality is essential to the nation’s economic pulse, yet it is ensnared in a web of governance and sustainability issues and inefficiencies. The full servicing of our obligations to IPPs looks increasingly unlikely. The issues include currency mismatch (earnings of IPPs denominated in dollars while revenues of the system are in rupees), negotiated rates on generous terms (e.g. committed returns of 15% in dollar terms and income tax exemptions for the entire period of the contract), and sovereign guarantees covering even market risk. The so-called ‘circular debt’ is the outcome of these structural issues that have made the economy uncompetitive and hence a huge constraint to growth and its sustainability. The situation has been worsened by poor policy design and ‘other considerations’ resulting in installed generation capacity today being close to 15,000 MW, more than the demand, partly also owing to inadequate carrying capability of the transmission infrastructure and distribution systems. This has given rise to a requirement of Rs. 2 trillion in 2023/24 for capacity payments of which Rs. 1.3 trillion will just be for the plants lying idle; with the share of capacity payment in the base tariff per unit now Rs. 24 billion (including all entities generating energy- thermal, solar, wind, nuclear, government owned, etc.) In the intricate dance between policy formulation and economic stability, the narrative of local investors and consumers emerges as a poignant tale of uncertainty and disillusionment. #Pakistan #IPPs #CapacityPayments #ElectricityBills #EnergyTariffs #Taxes #IncomeTax #Inflation #PowerPlants #PIDE #Podcast #ThinkTank #Economy #Debate For Further Details Please Visit: www.pide.org.pk   / pidepk     / pideislamabad     / pidepk     / pidepk