Federal Minister for Power Sardar Awais Ahmed Khan Leghari on Tuesday said that the government was focusing on reforming Pakistan’s power sector by operationalizing a competitive electricity market, privatizing distribution companies (DISCOs) and addressing key challenges such as circular debt, over-reliance on imported fuels and outdated infrastructure.
Speaking at the Pakistan Business Council’s Dialogue on the Economy, he said the privatization of electricity distribution is underway, marking a transformative shift in the country’s energy sector.
By 2025, the government will no longer be involved in the electricity trade, enabling consumers and power companies to negotiate directly for affordable electricity, he explained. The minister highlighted the government’s commitment to reducing electricity taxes on the public while promoting eco-friendly energy solutions. He mentioned the introduction of the National Electric Vehicle (EV) Policy, which aims to encourage the adoption of electric vehicles. As part of the initiative, tariffs at electric charging stations have been significantly reduced to make EVs more accessible.
To minimize reliance on imported coal, he said, Chinese companies operating coal-fired power plants in Pakistan will transition to using locally mined coal from the Thar region. This shift is expected to lower import costs and promote the use of domestic resources, he added. The minister said the government is currently working on revising agreements with all Independent Power Producers (IPPs). He added that the next step would be to renegotiate contracts with government-owned IPPs. He said, that the government has finalized Service Level Agreements (SLAs) for the power sector, aiming to enhance operational efficiency and ensure better service delivery. He said that uniform tariffs will no longer be sustainable post-privatization, and new service-level agreements have been introduced for the power sector. Additionally, industrial estates and economic zones will now manage their distribution systems.
Leghari reaffirmed the government’s commitment to reducing circular debt and ensuring stability in the energy sector. He said that efforts to lower electricity costs and promote renewable energy remain top priorities. The minister said that December witnessed a 7 percent increase in power demand, attributed to affordable energy initiatives introduced by the government.
Highlighting the importance of the energy sector for economic stability, Leghari reiterated the government’s resolve to sell surplus power to prevent wastage. “Our focus is on fostering a sustainable, efficient, and consumer-friendly energy sector,” he said.
US Envoy
US Charge D’ Affairs in Pakistan Ms Natalie A Baker called on Federal Minister for Energy (Power Division) Sardar Awais Ahmed Khan Leghari here on Tuesday.
The Federal Minister apprised the US Diplomat about the recent reforms undertaken in the Power Sector by the present Government, said a press release. He said that due to these reforms the Power Sector has shown improvement as compared to last year. He said that the Government is following a policy of non-interference and has appointed completely independent of BoDs of Power Sector State Owned Enterprises so that they can take their decisions on merit.
The US Charge D Affairs invited the Federal Minister for participation in Energy Security Dialogue that is being organized in Washington, stating that his participation will be highly valuable. The Federal Minister while acknowledging close partnership of various US Agencies with Power Sector, said that it has gone a long way in building the strategic partnership and Pakistan values its relationship in this regard. He further said that team in Power Division has been working to further expend and explore new avenues of cooperation.
Regarding privatization of DISCOs Sardar Awais Leghari informed that transparency and international standards are being followed which is bound to attract the investors. He invited the US investor to take part in the competitive bidding in this regard. The Minister also informed about the efforts in reducing the Power Tariff for consumers in the country. Ms Natalie A Baker while appreciating the efforts made by the Power Division said that it is now quite obivious that the Government is making serious efforts to reduce electricity tariff in the country. She also assured to working together to explore new vistas of cooperation in the energy sector.