Govt launches plan to replace 100 million fans, signals power sector debt restructuring

The government on Thursday launched the Prime Minister’s Fan Replacement Programme to replace 100 million conventional fans with energy-efficient models and signalled plans to restructure power sector debt as part of broader reforms.

Speaking at the launch ceremony, Federal Minister for Power Awais Leghari said the prime minister and cabinet were aligned on implementing structural changes in the energy sector. He said debt restructuring options were under consideration to stabilise the sector.

Leghari said electricity demand had dropped to around 8,000 megawatts at certain times, attributing the trend partly to rapid solar adoption following earlier high tariffs. He said lower demand had created operational challenges, with plants running for limited hours while requiring year-round maintenance.

On net metering, he said the Power Division would approach the National Electric Power Regulatory Authority on the prime minister’s directions, adding that existing net metering consumers would remain under the current regime.

The minister said electricity tariffs had declined by up to 20 percent over the past 18 to 20 months. He stated that protected consumers had received relief of 35 to 40 percent, while industrial tariffs had been reduced by 35 percent to around 11.5 cents per unit during the last two years.

Under the fan replacement programme, consumers will be able to exchange old fans for energy-efficient models by paying around Rs1,000. The earlier requirement of mandatory return or buyback of old fans has been withdrawn.

Leghari said replacing inefficient fans would reduce electricity consumption, ease pressure during peak hours and limit the need for additional generation capacity. He added that clean energy accounted for 55 percent of electricity generation this year, with a target of 90 percent by 2034.

Minister for Climate Change Musadik Malik said households could save up to Rs12,000 per fan annually by switching to efficient models. He linked energy efficiency to climate resilience, noting that recent floods had caused significant economic losses and disruption.

Managing Director of the National Energy Conservation Authority Humayoun Khan said the initiative would reduce electricity consumption and support grid stability.

In a statement, Federal Minister for Finance and Revenue Muhammad Aurangzeb said the Ministry of Finance had allocated Rs2 billion as a 10 percent first-loss risk guarantee to encourage banks to finance consumer purchases under the programme.

He said a pilot phase had already been completed with participation of 11 banks. During the pilot, 186 energy-efficient fans were installed, with disbursements of Rs1.35 million benefiting 67 borrowers. He said the next phase would focus on scaling up the programme in coordination with the State Bank of Pakistan and commercial banks.