Islamabad: At a pivotal event on Tuesday, Pakistan’s power sector embarked on a significant reform project aimed at enhancing efficiency and spurring economic growth. The launch, a collaborative effort between the School of Business Studies, IBA, and the Ministry of Energy (Power Division), was marked by a detailed keynote address from the Federal Minister of Power, Sardar Awais Ahmed Khan Leghari. He outlined a multifaceted strategy focused on improving the governance of distribution companies, overhauling transmission infrastructure, and stimulating industrial demand through policy interventions.
According to Press Information Department, Minister Leghari detailed the critical areas of the Pakistan Power Reforms Project during his address. He emphasized that the structural reforms would soon yield visible improvements, projecting a few months before the initial results become apparent. The reforms aim at a radical transformation of the power sector’s transmission infrastructure to enhance efficiency and reduce losses.
The Minister also tackled the issue of Pakistan’s surplus generation capacity, stating that the government has devised plans to boost industrial demand for electricity. This move is expected to accelerate industrial and economic growth significantly. On tariffs, Leghari explained that front-loaded debt repayments have heavily influenced capacity charges, but reassured that applying various policy levers should help in achieving more rationalized pricing.
A major shift towards a competitive market regime was another cornerstone of the reform agenda highlighted by Leghari. This shift will allow for the trading of electrons between buyers and sellers, rewarding efficiency and moving away from the outdated cost-plus, single-buyer model. Additionally, the Minister announced forthcoming policies to promote the adoption of Electric Vehicles (EVs), particularly focusing on 2-wheelers and 3-wheelers, which will not only boost electricity demand but also potentially reduce household transport expenditures and the national fuel import bill.
Highlighting Pakistan’s achievements in sustainable energy, Leghari noted that over 55 percent of the country’s electricity is currently generated from clean sources such as hydel, nuclear, and renewables, with expectations to exceed 70 percent in the coming years. He also pointed out that almost 75 percent of electricity generation is sourced indigenously, a figure that is projected to rise above 90 percent shortly.
The event concluded with a reaffirmation of the government’s commitment to a reform agenda that promises enhanced governance standards and better efficiency in the generation, transmission, and distribution of electricity. These reforms are expected to lead to a reduction in electricity prices and, consequently, further industrial and economic growth.