IMF approves Pakistan's plan to cut electricity prices

The International Monetary Fund (IMF) has agreed to let the Pakistan government reduce electricity tariffs after negotiations between Islamabad’s economic team and the IMF delegation as part of discussions for the second tranche of over $1 billion under the $7 billion Extended Fund Facility (EFF), a local news channel reported. 

During talks on tariff rebasing, the Ministry of Energy presented a proposal to cut base tariffs by up to Rs2 per unit starting in April or May. Sources indicate that the IMF has given its approval, leaving the final decision to NEPRA and the Ministry of Energy.

Pakistan also shared a privatisation plan for power distribution companies (DISCOs), but the IMF raised concerns over delays in privatizing two DISCOs by January and highlighted inefficiencies in the power sector. 

Additionally, the global lender opposed amendments to the NEPRA Act proposed by the Ministry of Energy.

Further discussions on circular debt, tax policies, and sovereign wealth fund management are scheduled for today. Meanwhile, an IMF delegation may return after Eid for talks focused on governance reforms.