ISLAMABAD: A group of international investors, including development finance institutions that have collectively invested $2.7 billion in Pakistan’s power sector, has urged the federal government to refrain from renegotiating power purchase agreements (PPAs) with solar and wind Independent Power Producers (IPPs). In a letter addressed to key government officials, including the Minister of Energy, Minister of Finance, and the Special Assistant to the Prime Minister on Energy, the investors emphasized that such actions could undermine investor confidence and discourage future investments.
While acknowledging Pakistan’s ongoing energy sector challenges, the investors expressed understanding of the government’s efforts to address these issues. However, they warned that altering contracts without comprehensive consultation could damage Pakistan’s credibility as an investment destination, particularly in the renewable energy sector. The letter pointed out that maintaining investor confidence has been pivotal in securing both local and foreign investments that are vital to expanding the country’s energy infrastructure.
Furthermore, the investors reminded the government that many of the IPPs they finance are bound by agreements that prohibit significant changes to their contracts, including PPAs, without prior approval from lenders. The group called on the government to explore alternative solutions to address energy sector issues while respecting the original agreements.
The investors reiterated their willingness to collaborate with the government to help resolve Pakistan’s energy challenges, stressing the importance of maintaining trust and honoring commitments in order to foster a sustainable and thriving energy sector.
