Negotiations with Independent Power Producers (IPPs), particularly those involving local owners under the 1994 and 2002 power policies, have entered a new phase. Prominent businessmen who own these IPPs have been approached by certain state actors and, in many cases, pressured to accept terms without question. Some IPPs face contract terminations, while others are being pushed to accept “take-and-pay” agreements or lower returns on equity.

Most of these IPPs had already renegotiated during the PTI government, but the impact was negligible then and is likely to be even smaller now. The real focus should be on the IPPs established under the 2015 policies, where most of the funding came from Chinese investors. The government attempted to negotiate with the Chinese, but they returned empty-handed. This raises the question: why target the local IPPs again?

It’s important to remember that no one invested in these projects at gunpoint. Most IPPs, including those funded by Chinese investors, were initiated at the request of the government at the time, with mutual agreements on rates of return.

Certainly, there were cases where costs were inflated and efficiencies overstated, resulting in windfalls for some IPP owners. However, these issues point to regulatory........

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