Govt Saves Rs. 80 Billion After Revising Solar & Wind Power Deals

Officials from the Power Division told the Economic Coordination Committee (ECC) that wind power tariffs under earlier policies were as high as Rs. 42 per unit, compared to around Rs. 17 per unit under newer cost-plus arrangements, prompting a review of existing contracts.

A task force on power sector reforms renegotiated tariff structures with 14 wind power plants and one solar project, focusing on reducing return on equity, lowering operation and maintenance costs, revising indexation mechanisms and waiving late payment interest.

Under the 2013 upfront tariff policy, three wind projects agreed to revised terms that are expected to generate savings of about Rs38.9 billion over the life of the projects. Meanwhile, 11 plants operating under the post-2018 cost-plus tariff agreed to similar adjustments, including exchange rate rationalisation and interest waivers.

In addition, amendments related to a government-owned solar project are expected to result in further savings of around Rs45.7 billion, mainly through the waiver of late payment interest and improved payment structures.