International Investors Urge Pakistan to Uphold Power Purchase Agreements
Global investors have called on Pakistan’s federal government to refrain from renegotiating power purchase agreements (PPAs) with solar and wind Independent Power Producers (IPPs).
In a letter addressed to the Minister of Energy, Minister of Finance, and the Special Assistant to the Prime Minister on Energy, a consortium of development finance institutions—having invested $2.7 billion in Pakistan’s power sector—warned that such renegotiations could undermine investor confidence and deter future private sector investments.
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While acknowledging Pakistan’s ongoing energy sector challenges and the government’s reform efforts, the investors cautioned that modifying agreements without extensive consultations could damage the country’s credibility as an attractive investment hub, particularly in renewable energy. They stressed that investor confidence has been pivotal in securing both local and foreign investments, which remain essential for sectoral growth.
Additionally, the letter pointed out that the IPPs funded by these institutions are bound by financing agreements that prohibit major contractual changes, including amendments to their PPAs, without prior lender approval. The group urged the government to seek alternative solutions to address energy sector challenges while honoring existing commitments.
The investors reaffirmed their willingness to collaborate with the government in tackling Pakistan’s energy issues.
