How will Pakistan’s power system be fixed? (Part Three)
Are IPPs truly foreign-owned, making their contracts beyond the government’s reach?
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Pakistan has a total of 32 fossil fuel based power plants. Of these, 18 are owned by just five major business groups. In effect, nearly half of the country’s power sector is concentrated in the hands of a few families.
For years, the government and the Ministry of Energy have maintained that any attempt to terminate IPP contracts would expose Pakistan to serious international repercussions and potentially trigger a global dispute.
However, my research points to a different reality. Around ninety percent of the IPPs operating in Pakistan are either owned or significantly controlled by local business groups. Therefore, the claim that these are purely international agreements, immune to review or renegotiation, does not reflect the full picture.
In several cases, limited shareholding was allocated to foreign investors to give the impression of international projects, while actual ownership and control largely remained with local groups from the outset.
It is true that when the IPP policy was introduced in 1994, a substantial number of foreign investors entered Pakistan. But over time, most exited by selling their stakes, and ownership of these projects gradually shifted to Pakistani companies.
In this part, for the first time, the major fossil fuel based IPPs in Pakistan are compiled in one place. These include private power producers using coal, gas, RLNG, furnace oil, and other fossil fuels. This consolidated view helps us clearly understand the extent of influence these companies have had in shaping Pakistan’s current power system.
It was through the combined decisions of these companies and the government that additional charges such as fixed charges and FCA (Fuel Cost Adjustment) were introduced in electricity bills. Through these mechanisms, payments continued to be collected from consumers and transferred to power companies.
Let us examine these companies:
1. Pak Gen Power (Owned by Nishat Group)
2. Nishat Power (Owned by Nishat Group)
3. Nishat Chunian Power (Owned by Nishat Chunian Group)
4. Lalpir Power (Owned by Nishat Group). Originally owned by a US company, it was acquired by Nishat Group in 2007. It continued supplying electricity under a government contract until September 2024. Following public pressure over high electricity costs, the contract was terminated. The government argued that older IPP agreements had imposed an excessive financial burden and required renegotiation or termination. The company warned that unilateral termination could lead to international arbitration, while the government indicated that these agreements and their financial benefits could be subject to investigation. A settlement of approximately 12.5 billion rupees was eventually paid. The plant is currently in preservation mode and may be utilised in future electricity markets.
5. Hub Power Company (Hubco) (Owned by Hubco Group)
6. Narowal Energy (Owned by Hubco Group)
7. China Power Hub Generation Company (CPHGC) (Jointly owned by Hubco and Chinese partners)
8. Thar Energy Limited (TEL) (Owned by Hubco and partners)
9. ThalNova Thar Power (Owned by Hubco and partners) The current Chairman of Hubco Group is M. Habibullah Khan. Initially, major shares were held by foreign investors. After their exit, Hussain Dawood became Chairman. Later, by acquiring approximately 15.7 percent shares, M. Habibullah Khan assumed control and gradually emerged as a key stakeholder in multiple major power projects.
10. Fauji Kabirwala Power Company (Owned by Fauji Foundation)
11. Foundation Power Company Daharki (Owned by Fauji Foundation)
12. Orient Power Company (Owned by Orient Group)
13. Saba Power Company (Owned by Saba Power Company) These two projects are owned by Nadeem Babar, who served as Special Assistant on Petroleum during Imran Khan’s tenure.
14. Kohinoor Energy Limited (Owned by Saigol Group)
15. Uch Power Limited (Uch I) (Owned by Sapphire Fibres 50 percent and Mind Bridge 50 percent)
16. Uch II Power (Owned by Sapphire Fibres 50 percent and Mind Bridge 50 percent)
17. Sapphire Electric Company Limited (Owned entirely by Sapphire Group)
18. TNB Liberty Power (Owned by Liberty Group)
19. Liberty Power Tech (Owned by Liberty Group)
20. Engro Powergen Qadirpur (Owned by Engro Group)
21. Lucky Electric Power (Owned by Lucky Group)
22. Attock Gen Power (Owned by Attock Group)
23. Atlas Power (Owned by Atlas Group)
24. Saif Power (Owned by Saif Group)
25. Halmore Power Generation (Owned by Halmore Group)
26. Gul Ahmed Energy (Owned by Gul Ahmed Group)
27. Tapal Energy (Owned by Tapal Group)
28. Rousch Power (Currently under the Government of Pakistan through NPPMCL). This plant is no longer fully operational under the traditional IPP model. Its original contract has expired, and it remains either partially active or largely inactive.
29. Sahiwal Coal Power (Owned by Huaneng Shandong, China)
30. Port Qasim Coal Power (Jointly owned by China and Qatar)
31. Engro Thar Coal Power (Owned by Engro Group and partners)
32. Thar Coal Block I Power (Owned by Shanghai Electric, China)
A consolidated view of these 32 power plants shows that 28 are controlled by Pakistani business groups, while only 4 involve significant foreign ownership, primarily by Chinese companies.
This raises an even more striking point. Out of these 32 IPPs, 28 are local. The Government of Pakistan distributes approximately 3000 billion rupees annually among these companies. On a simple average, this equates to around 94 billion rupees per company per year. If we consider only the 28 local companies, the average exceeds 100 billion rupees per company annually.
It is important to note that this is only a general estimate to illustrate scale. It does not imply equal payments. In reality, capacity payments vary based on each plant’s generation capacity, contractual terms, and cost structure. For instance, between 2015 and 2024, Lalpir with approximately 362 MW received 52.081 billion rupees, Pak Gen with around 365 MW received 50.834 billion rupees, while Hubco with 1292 MW received approximately 205.034 billion rupees. This clearly demonstrates that payments are directly linked to capacity.
For example, Hubco’s capacity is roughly 3.5 times that of Lalpir, and its payments are correspondingly close to four times higher. This data has been obtained from CPPA G.
This leads to a more fundamental question: who is truly benefiting from this system, and why does the burden consistently fall on the ordinary consumer? Where is the money extracted from the public actually going, and how have these IPPs accumulated vast assets and expanded into multiple ventures?
This is not merely a case of imbalance. It reflects a broader pattern of economic exploitation that has significantly impacted the average citizen.
If a genuine and impartial investigation is to be conducted, conventional government commissions will not be sufficient. What is required is an independent and transparent framework involving economists, energy experts, auditors, and civil society representatives, with proceedings open to the public. Without transparency and independence from vested interests, neither the truth will emerge nor will a sustainable solution to Pakistan’s electricity crisis be achieved.
(Continued in the next part)
For years, the government and the Ministry of Energy have maintained that any attempt to terminate IPP contracts would expose Pakistan to serious international repercussions and potentially trigger a global dispute.
However, my research points to a different reality. Around ninety percent of the IPPs operating in Pakistan are either owned or significantly controlled by local business groups. Therefore, the claim that these are purely international agreements, immune to review or renegotiation, does not reflect the full picture.
In several cases, limited shareholding was allocated to foreign investors to give the impression of international projects, while actual ownership and control largely remained with local groups from the outset.
It is true that when the IPP policy was introduced in 1994, a substantial number of foreign investors entered Pakistan. But over time, most exited by selling their stakes, and ownership of these projects gradually shifted to Pakistani companies.
In this part, for the first time, the major fossil fuel based IPPs in Pakistan are compiled in one place. These include private power producers using coal, gas, RLNG, furnace oil, and other fossil fuels. This consolidated view helps us clearly understand the extent of influence these companies have had in shaping Pakistan’s current power system.
It was through the combined decisions of these companies and the government that additional charges such as fixed charges and FCA (Fuel Cost Adjustment) were introduced in electricity bills. Through these mechanisms, payments continued to be collected from consumers and transferred to power companies.
Let us examine these companies:
1. Pak Gen Power (Owned by Nishat Group)
2. Nishat Power (Owned by Nishat Group)
3. Nishat Chunian Power (Owned by Nishat Chunian Group)
4. Lalpir Power (Owned by Nishat Group). Originally owned by a US company, it was acquired by Nishat Group in 2007. It continued supplying electricity under a government contract until September 2024. Following public pressure over high electricity costs, the contract was terminated. The government argued that older IPP agreements had imposed an excessive financial burden and required renegotiation or termination. The company warned that unilateral termination could lead to international arbitration, while the government indicated that these agreements and their financial benefits could be subject to investigation. A settlement of approximately 12.5 billion rupees was eventually paid. The plant is currently in preservation mode and may be utilised in future electricity markets.
5. Hub Power Company (Hubco) (Owned by Hubco Group)
6. Narowal Energy (Owned by Hubco Group)
7. China Power Hub Generation Company (CPHGC) (Jointly owned by Hubco and Chinese partners)
8. Thar Energy Limited (TEL) (Owned by Hubco and partners)
9. ThalNova Thar Power (Owned by Hubco and partners) The current Chairman of Hubco Group is M. Habibullah Khan. Initially, major shares were held by foreign investors. After their exit, Hussain Dawood became Chairman. Later, by acquiring approximately 15.7 percent shares, M. Habibullah Khan assumed control and gradually emerged as a key stakeholder in multiple major power projects.
10. Fauji Kabirwala Power Company (Owned by Fauji Foundation)
11. Foundation Power Company Daharki (Owned by Fauji Foundation)
12. Orient Power Company (Owned by Orient Group)
13. Saba Power Company (Owned by Saba Power Company) These two projects are owned by Nadeem Babar, who served as Special Assistant on Petroleum during Imran Khan’s tenure.
14. Kohinoor Energy Limited (Owned by Saigol Group)
15. Uch Power Limited (Uch I) (Owned by Sapphire Fibres 50 percent and Mind Bridge 50 percent)
16. Uch II Power (Owned by Sapphire Fibres 50 percent and Mind Bridge 50 percent)
17. Sapphire Electric Company Limited (Owned entirely by Sapphire Group)
18. TNB Liberty Power (Owned by Liberty Group)
19. Liberty Power Tech (Owned by Liberty Group)
20. Engro Powergen Qadirpur (Owned by Engro Group)
21. Lucky Electric Power (Owned by Lucky Group)
22. Attock Gen Power (Owned by Attock Group)
23. Atlas Power (Owned by Atlas Group)
24. Saif Power (Owned by Saif Group)
25. Halmore Power Generation (Owned by Halmore Group)
26. Gul Ahmed Energy (Owned by Gul Ahmed Group)
27. Tapal Energy (Owned by Tapal Group)
28. Rousch Power (Currently under the Government of Pakistan through NPPMCL). This plant is no longer fully operational under the traditional IPP model. Its original contract has expired, and it remains either partially active or largely inactive.
29. Sahiwal Coal Power (Owned by Huaneng Shandong, China)
30. Port Qasim Coal Power (Jointly owned by China and Qatar)
31. Engro Thar Coal Power (Owned by Engro Group and partners)
32. Thar Coal Block I Power (Owned by Shanghai Electric, China)
A consolidated view of these 32 power plants shows that 28 are controlled by Pakistani business groups, while only 4 involve significant foreign ownership, primarily by Chinese companies.
This raises an even more striking point. Out of these 32 IPPs, 28 are local. The Government of Pakistan distributes approximately 3000 billion rupees annually among these companies. On a simple average, this equates to around 94 billion rupees per company per year. If we consider only the 28 local companies, the average exceeds 100 billion rupees per company annually.
It is important to note that this is only a general estimate to illustrate scale. It does not imply equal payments. In reality, capacity payments vary based on each plant’s generation capacity, contractual terms, and cost structure. For instance, between 2015 and 2024, Lalpir with approximately 362 MW received 52.081 billion rupees, Pak Gen with around 365 MW received 50.834 billion rupees, while Hubco with 1292 MW received approximately 205.034 billion rupees. This clearly demonstrates that payments are directly linked to capacity.
For example, Hubco’s capacity is roughly 3.5 times that of Lalpir, and its payments are correspondingly close to four times higher. This data has been obtained from CPPA G.
This leads to a more fundamental question: who is truly benefiting from this system, and why does the burden consistently fall on the ordinary consumer? Where is the money extracted from the public actually going, and how have these IPPs accumulated vast assets and expanded into multiple ventures?
This is not merely a case of imbalance. It reflects a broader pattern of economic exploitation that has significantly impacted the average citizen.
If a genuine and impartial investigation is to be conducted, conventional government commissions will not be sufficient. What is required is an independent and transparent framework involving economists, energy experts, auditors, and civil society representatives, with proceedings open to the public. Without transparency and independence from vested interests, neither the truth will emerge nor will a sustainable solution to Pakistan’s electricity crisis be achieved.
(Continued in the next part)