ISLAMABAD: Energy Minister Awais Leghari announced on Wednesday that the energy ministry has embarked on major reforms aimed at reducing reliance on Independent Power Producers (IPPs) and addressing critical issues in Pakistan’s energy sector.
Speaking to the Senate Standing Committee on Energy, Leghari highlighted several challenges, including power outages, high transmission losses, elevated tariffs, limited renewable energy sources, and a substantial circular debt.
Key among the reforms is the operationalisation of an energy exchange, allowing power plants to sell electricity directly to buyers. “The plant which will produce electricity will sell it to the buyer through an energy exchange. Operationalising this exchange is part of our reforms,” Leghari explained.
The government is also focusing on modernising the power grid and privatising distribution companies (DISCOs) to enhance efficiency. Leghari emphasized that these measures aim to prevent future governments from having to purchase electricity from IPPs.
“Our government is taking the issue of IPPs seriously. Whatever relief is possible regarding IPPs will be given to the people,” he assured, addressing concerns about high electricity prices.
Leghari also addressed historical issues, noting that many power plants were installed with external capital and loans between 2015 and 2018, primarily from Chinese investments amounting to about $8 billion. He criticized the previous government for delaying the audit of IPPs, which led to ongoing problems.
He revealed plans to privatise DISCOs, stating, “Advertisement for the privatisation of DISCOs will be issued next year. Over the next two to three months, our financial advisers will determine the market capacity.”
These reforms represent a significant shift in Pakistan’s energy policy, aiming to make the sector more efficient and less dependent on costly IPPs.
