The federal government has secured agreements with 36 Independent Power Producers (IPPs) that are expected to save the national exchequer Rs3.69 trillion in future capacity and energy payments, according to a progress briefing held Wednesday on power sector reforms.
The savings were shared during a high-level meeting chaired by Prime Minister Shehbaz Sharif, where officials reviewed developments in electricity generation, transmission, and distribution. The settlement with IPPs marks a major development in addressing the chronic circular debt problem, which has long weighed on Pakistan’s energy finances.
The meeting also reviewed the government’s solarisation drive in Balochistan, with officials confirming the successful conversion of agricultural tube wells to solar power, a measure aimed at lowering energy costs and boosting agricultural output in the province.
Prime Minister Sharif also issued directives for expediting several energy-related initiatives, including the installation of smart electricity meters, with an instruction to submit a detailed progress report, the transition of industrial power consumers to dedicated transmission lines to ensure uninterrupted supply, and acceleration of renewable energy projects, with an emphasis on environmentally friendly and low-cost sources.
Officials told the prime minister that shifting industrial users to independent transmission infrastructure is expected to raise production capacity, reduce reliance on imports, and improve export competitiveness.
The PM reiterated that the reform agenda must deliver not only financial sustainability but also consumer relief, particularly in the form of reliable and affordable electricity. He called for prompt implementation and coordination across federal and provincial lines.
Pakistan’s power sector has struggled with structural inefficiencies, mounting circular debt, and high transmission and distribution losses. The government has repeatedly committed to sectoral reform under its agreements with the IMF and other multilateral creditors. The IPP settlement and Balochistan’s solarisation rollout are being positioned as milestones in that trajectory.
