Outstanding payments to power producers in Pakistan have climbed to Rs. 1.2 trillion, officials revealed during a public hearing held by the National Electric Power Regulatory Authority (NEPRA).
The hearing was chaired by NEPRA Chairman Waseem Mukhtar. It focused on reviewing a petition submitted by the Central Power Purchasing Agency-Guarantee (CPPA-G).
Officials informed the regulator that nearly Rs. 500 billion of the outstanding amount is owed to Chinese power producers. The issue continues to raise concerns about liquidity pressures in the power sector.
The hearing was convened to assess CPPA-G’s request for the determination of market operator fees for the fiscal year 2025–26. CPPA-G has sought revenue requirements of Rs. 2.887 billion for the coming year.
This figure excludes adjustments from previous years. When prior year adjustments are included, the total revenue requirement increases to Rs. 4.664 billion.
Officials also shared details of CPPA-G’s projected costs. The general establishment cost for FY26 is estimated at Rs. 2.225 billion. This reflects an increase of 10.75 percent compared to the previous year.
Employee-related expenses are expected to rise significantly. Salaries and benefits are projected to increase by 17 percent to Rs. 2.175 billion. Pay and allowances alone are proposed at Rs. 1.627 billion.
Officials said inflation-driven adjustments are the main reason for the increase. This rise comes despite a reduction in staff numbers.
During the last fiscal year, 20 employees were transferred to the Independent System and Market Operation entity. In addition, 26 employees resigned from CPPA-G.
Administrative expenses are also expected to increase. These costs are projected at Rs. 322 million for FY26. This represents nearly a 7 percent rise compared to last year.
The rising backlog of payments to each IPP remains a major challenge for the power sector. Delayed payments affect fuel supply, plant operations, and investor confidence.
Officials noted that unresolved IPP liabilities continue to burden the energy value chain. They also add pressure on electricity tariffs and public finances.
After reviewing the petition and hearing arguments, NEPRA concluded the session. The authority has reserved its judgment and will announce a decision later.
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The issue of growing IPP payments remains under close regulatory review.
