IMF Agrees to Consider Electricity Price Reduction, Seeks Proposals from Pakistan
Islamabad: The International Monetary Fund (IMF) has asked the Pakistani government to submit proposals to curb electricity theft, reduce line losses, and lower capacity charges, signaling readiness to consider electricity price reductions.
According to *Express News*, the IMF also sought explanations from the government regarding the shortfall in provincial surplus budget targets and requested a comprehensive plan to tackle power sector inefficiencies.
During the second round of semi-annual economic review talks, Pakistan assured the IMF that the circular debt would be eliminated ahead of the six-year target. Officials from the Power Division briefed the IMF mission on reforms in the energy sector.
Government representatives informed the IMF that, against a surplus budget target of Rs. 1,200 billion, provinces posted Rs. 921 billion, with Punjab contributing Rs. 348 billion, Sindh Rs. 283 billion, Khyber Pakhtunkhwa Rs. 176 billion, and Balochistan Rs. 114 billion. The Khyber Pakhtunkhwa government is expected to brief the IMF mission on September 29 and October 1.
The briefing highlighted that losses had dropped to Rs. 397 billion compared to earlier estimates of Rs. 635 billion. It was further conveyed that debt flow reduction and restructuring would enhance financial discipline and restore investor confidence, without imposing additional burdens on consumers, as payments would continue through the existing Rs. 3.23 per unit surcharge.
The IMF was also updated on progress in talks with independent power producers (IPPs), privatization of three profitable DISCOs, and plans to hand over loss-making power companies to private sector management. Additionally, the deal includes restructuring of Rs. 660 billion in old debt and new financing of Rs. 565 billion.
The IMF urged Pakistan to accelerate reforms to improve the governance of distribution companies and ensure surplus electricity is effectively utilized in the industrial sector and cryptocurrency mining.
