In an important development, Liberty Power, Pakistan’s first private power plant, has offered to renegotiate its contract with the government, proposing a shift from dollar-based payments to transactions entirely in Pakistani Rupees.
The company is also ready to reduce its profit margins to help ease the country’s financial burden.
Shahryar Chishti, Chairman of Pak Asia Investment, the parent company of Liberty Power, shared this proposal during a press conference in Karachi.
He said that the proposal is part of their commitment to support the nation during challenging economic times. “We are prepared to send these proposals to the government soon,” Chishti confirmed.
Shahryar Chishti further said that the entire electricity system needs to be examined, as unaffordable electricity costs for consumers will ultimately affect the viability of power-producing companies. He noted that a significant portion of capacity charges is attributed to fuel costs.
He further said that cheaper gas would lead to cheaper electricity for consumers. Additionally, Chishti pointed out that the removal of the gas development surcharge by the government would further reduce electricity costs.
The Liberty Power CEO acknowledged that Pakistan's energy situation has been deteriorating for an extended period. He stated that Liberty Power shared its profits in 2021 and has been facing challenges in the electricity sector since then.
To address this, Liberty plans to submit proposals to the federal government to reduce electricity prices. The company is willing to adjust its rate of return from dollars to Pakistani rupees and is urging other power plants to collaborate on finding solutions to lower electricity costs.
“Collective effort is necessary to provide relief to consumers through reduced electricity prices,” Chishti stressed.
On the other hand, Liberty Power’s CEO, Imran Ahmed, further explained that the power plant operates using raw gas directly sourced from local gas fields.
He suggested that if the government could supply raw gas from other fields as well, Liberty Power could generate electricity at a lower cost, providing much-needed relief to the national grid.
The executives highlighted that the rising cost of electricity is primarily driven by debt and limited electricity usage, coupled with heavy government taxes.
They warned that if consumers are unable to afford electricity prices, it could threaten the sustainability of power companies. "We all need to work together to solve this problem," they urged.
