ISLAMABAD: The Ministry of Finance has instructed the Ministry of Planning, Development and Special Initiatives (MPD&SI) to surrender Rs 50 billion in favour of the Power Division.
This move will enable the Power Division to receive a Technical Supplementary Grant (TSG) of the same amount to cover additional subsidy requirements, according to sources cited by Business Recorder.
The Economic Coordination Committee (ECC) recently approved allocating Rs 50 billion from the Public Sector Development Program (PSDP) to the Power Division as a subsidy to meet Circular Debt (CD) targets agreed with the International Monetary Fund (IMF).
The Power Division had briefed the ECC on May 5, 2025, regarding plans for off-grid solutions, including solarisation of tube wells in Balochistan for the fiscal year 2024-25. This initiative follows directives from the Prime Minister’s Office issued in May 2024.
A consultative meeting chaired by the Minister for Power and the Chief Minister of Balochistan included several federal and provincial officials, culminating in a decision to solarise approximately 27,000 agricultural tube wells. The government will compensate up to Rs 2 million per tube well, contingent on disconnection from the grid.
The funding cost of around Rs 55 billion will be shared by the federal government and Balochistan at a 70:30 ratio.
An agreement outlining the implementation mechanism was signed on July 8, 2024, followed by Cabinet approval on July 31, 2024. So far, Rs 14 billion has been disbursed through TSG from the National Food Security and Research Division’s budget for the solarisation program.
The Power Division informed the forum that the remaining Rs 24.5 billion will come from the ‘additional subsidy’ allocation for the power sector, as proposed by the Finance Division. To meet the revised CD flow target of Rs 337 billion by June 2025, the Power Division aims to utilize the full Rs 1.229 trillion subsidy budget.
The Cabinet had earlier approved reallocating Rs 50 billion from the PSDP to fund additional tariff differential subsidies. The Power Division requested that the Finance Division surrender this amount to consolidate power subsidies and issue a TSG of Rs 24.5 billion for the solarisation scheme in Balochistan.
Officials noted that the solarisation decision dates back to July 2024, explaining the delayed budgeting and current TSG claim, which covers the federal government’s share of the program.
