ISLAMABAD: The federal government plans to recover Rs1.938 trillion (\$6.7 billion) from electricity consumers across Pakistan over the next six years through an uncapped Debt Service Surcharge (DSS) of Rs3.23 per unit, according to sources in the Power Division.
The Central Power Purchasing Agency-Guaranteed (CPPA-G), acting on behalf of DISCOs, will finalize agreements with 18 commercial banks once asset valuations of some power distribution companies are clarified. Banks involved include HBL, NBP, UBL, Meezan, Bank Alfalah, and MCB among others.
The exact amount to be raised remains under review—estimated between Rs1.21 trillion to Rs1.275 trillion.
Last week, the federal cabinet approved a series of measures to implement the financing, including empowering CPPA-G and the Ministry of Energy to execute necessary agreements and direct DISCOs accordingly. Key approvals include:
- Amendments to Section 31(8) of the Electric Power Act and related tax laws to be incorporated in the Finance Bill 2025-26.
- Immediate release of Rs267 billion from budgeted equity investment in DISCOs, with Rs393 billion approved as a supplementary grant.
- Authorization for CPPA-G to settle Rs683 billion in outstanding debts of Power Holding Limited (PHL).
- Permission to disburse payments to IPPs, subject to waiver of Late Payment Interest (LPI).
- Legal vetting of amendments and term sheet rules by the Law and Justice Division.
The initiative is part of the government’s broader effort to restructure circular debt and stabilize the power sector’s financial health.
Story by Mushtaq Ghumman
