Pakistan Pays IPPs More Than Its Defence Budget

ISLAMABAD: Independent Power Producers (IPPs) received Rs2.935 trillion, or about $12 billion, during the first 11 months of the current fiscal year.

The amount is higher than Pakistan’s defence budget of around $10 billion. The total could rise further as billing for June 2026 is still pending.

The huge payments have renewed concerns about Pakistan’s expensive electricity system. Experts question whether such large sums could be better used for dams, infrastructure and cheaper sources of power. The Ministry of Energy said the government paid IPPs according to NEPRA-approved tariffs and existing agreements. It said no power plant was paid beyond its approved limits.

Imported-coal plants received the largest payment of Rs637.91 billion after producing 12,048 GWh. RLNG plants received Rs527.10 billion for 16,097 GWh.

Hydropower produced the most electricity at 34,234 GWh and received Rs375.04 billion. Nuclear plants generated 21,031 GWh and received Rs469.44 billion.

Local gas plants received Rs200.84 billion, wind projects Rs144.43 billion, solar projects Rs36.51 billion and bagasse plants Rs14.82 billion.

The figures have again put IPPs and Pakistan’s power sector at the centre of debate. A weaker rupee and higher imported fuel prices have further increased electricity costs. .. CN monotoring, 10 Sep 2026