“Water, water everywhere, nor any drop to drink” is a line from the poem The Rime of the Ancient Mariner by Samuel Taylor Coleridge, about a sailor stranded in the ocean, and thirsty. That line effectively describes the Pakistani economy: electricity, electricity everywhere, but prices too high to afford.
On paper, Pakistan has an abundance of electricity. Indeed, the country’s problem is that we have too much: electricity tariffs in Pakistan are sky high precisely because we have too much capacity that needs to be paid for, and is being paid for with a higher per-unit price.
This, in turn, has pushed Pakistan’s power sector towards a crisis of unprecedented proportions, one that is pushing consumers to their financial limits. With electricity tariffs reaching as high as Rs61 per kWh ($0.22) – among the highest globally – many households now face the stark reality of electricity bills surpassing their monthly rent. This dire situation has prompted the government to explore various short-term solutions, including debt reprofiling and renegotiation of Independent Power Producer (IPP) contracts.
These high tariffs are occurring at a time when the price of renewable energy, specifically solar electricity, are plummeting, thanks in large part to a glut of solar panels that have been imported into the country. Data from the Pakistan Bureau of Statistics indicates that over $1 billion worth of solar panels was imported into the country in calendar year 2023.
High grid prices and low solar energy prices are creating an opportunity that many have dreamed about for a long time, but nobody has managed to push through until now: consumer financing for rooftop solar, including for residential consumers.
Pakistani investors – at least those with a liquid net worth higher than Rs5 million – will soon have the opportunity to invest in a company that is betting on exactly this opening in the market: the Burj Clean Energy Modaraba, which this past week was listed on the Growth Enterprise Market (GEM) board, the micro-cap public listing exchange operated by the Pakistan Stock Exchange (PSX).
So what is the market opportunity, and how will Burj capitalize on it? The content in this publication is expensive to produce. But unlike other journalistic outfits, business publications have to cover the very organizations that directly give them advertisements. Hence, this large source of revenue, which is the lifeblood of other media houses, is severely compromised on account of Profit’s no-compromise policy when it comes to our reporting. No wonder, Profit has lost multiple ad deals, worth tens of millions of rupees, due to stories that held big businesses to account. Hence, for our work to continue unfettered, it must be supported by discerning readers who know the value of quality business journalism, not just for the economy but for the society as a whole.To read the full article, subscribe and support independent business journalism in Pakistan
