Pakistan’s power sector reforms could save Rs1.4 trillion through renegotiated IPP contracts, says report

Pakistan is set to save Rs1.4 trillion in its power sector through fiscal and energy reforms, including the renegotiation of contracts with Independent Power Producers (IPPs), according to the Pakistan Reforms Report 2026. 

The report, the second edition of the country’s comprehensive documentation of governance reforms, was launched by Mishal Pakistan, the World Economic Forum’s country partner institute. Federal Minister for Climate Change Dr. Musadik Malik, who was the chief guest at the event, discussed the government’s reform agenda, including plans to reduce regulatory duties over the next five years.

The report revealed that over 650 reforms were introduced in 2025, a notable increase from the previous year’s 620. Dr. Malik emphasised that a large portion of the reforms focused on digitalisation, aimed at improving public access to government services. He stressed the importance of credible documentation to build public trust and strengthen Pakistan’s international standing.

The report also highlighted that the energy sector saw the most reforms, with 118 changes introduced to improve governance and efficiency. As part of broader measures, the government aims to reduce tariffs for industries and provide direct relief to workers.

The reforms are part of the country’s larger push to address structural issues and unlock indigenous energy and mineral resources. Notably, progress on the $6 billion Reko Diq copper-gold project and new exploration policies targeting $5 billion in investment were also documented.

Amir Jahangir, CEO of Mishal Pakistan, noted that the report serves as a record of governance changes, allowing for a comparative and long-term view of Pakistan’s reform journey. He added that the 2026 edition reflects greater maturity, with a clear shift from announcements to tangible execution.

A key insight from the report is the alignment of reforms with Sustainable Development Goal 16 (Peace, Justice, and Strong Institutions), with a focus on strengthening the rule of law, accountability, and regulatory modernisation. This shift underscores Pakistan’s commitment to institutional capacity-building as the foundation for long-term socio-economic development.