ISLAMABAD: On Wednesday, the Cabinet Committee on Energy, chaired by Prime Minister Shehbaz Sharif, approved the establishment of the Independent System and Market Operator (ISMO) to reform Pakistan’s energy sector, as reported by Radio Pakistan.
ISMO will empower consumers to purchase electricity from multiple suppliers, moving away from the existing government-controlled system that currently serves as the sole buyer of power. This shift is expected to foster competition and enhance transparency, addressing long-standing challenges in Pakistan’s energy sector, such as circular debt, power theft, and transmission losses that have led to frequent blackouts and high electricity prices.
The committee’s decision to create ISMO is seen as a pivotal move toward a more competitive and transparent energy market, which could help ease the financial strain on both the government and consumers. However, the initiative still requires final approval from the federal cabinet.
“ISMO will gradually phase out the government’s role as the sole electricity buyer, transitioning to a multi-player, independent system,” stated the Prime Minister’s Office. “This will enable consumers to choose power suppliers beyond traditional distribution companies.”
The introduction of ISMO is anticipated to help reduce circular debt, stabilize electricity prices, and create a more efficient power sector. The ISMO board will include experts from the energy sector to oversee its operations and guide the transition.
During the meeting, PM Shehbaz underscored the urgency of implementing power sector reforms, emphasizing the need to curb theft and transmission losses. “We are prioritizing measures to reform Pakistan’s energy sector,” he noted.
