KARACHI: Earnings of Pakistan’s listed power sector increased 14 per cent year-on-year (YoY) to Rs54.6 billion in FY26, supported by provisioning for late payment surcharge (LPS) and excess profits related to non-performing loans (NPL) and non-performing exposures (NEL) recorded in the same period last year.
Lower finance costs, higher other income and increased contributions from associates also supported profitability, more than offsetting weaker core earnings following the termination of Hub Power Company’s (Hubco) base-plant power purchase agreement (PPA) from October 1, 2025.
According to a report by Arif Habib Limited, sector sales rose 10.1pc YoY to Rs101bn in FY26, mainly due to higher plant utilisation and improved tariff pricing across KSE-100-listed independent power producers (IPPs).
For Kot Addu Power Company (Kapco), sales benefited from its entry into a three-year tripartite PPA with the Central Power Purchasing Agency-Guarantee (CPPA-G) and National Grid Company of Pakistan Limited (NGCPL), helping offset the impact of Hubco’s base-plant PPA termination.
Electricity generation increased 1.2pc YoY to 128,699 GWh during FY26. However, generation remained broadly around 128,000 GWh for the fourth consecutive year and well below the FY22 peak of 145,094 GWh, indicating continued weakness in electricity demand.
Plant utilisation improved across the sector during the year, helped by fewer RLNG supply disruptions and a modest recovery in power demand. The recovery was supported by lower electricity tariffs, the shift of industrial consumers towards the national grid, incremental consumption packages for industrial and agricultural users, and improved economic activity.
NEL’s utilisation increased sharply to 8.6pc in FY26 from 2.0pc in FY25, while CPHGC’s utilisation rose to 11.2pc from 6.4pc.
Similarly, TEL and TNPTL recorded utilisation rates of 68.8pc and 69.4pc, respectively, compared with 60.6pc and 67.7pc in FY25.
LEL’s utilisation remained broadly stable at 48.8pc, against 48.3pc a year earlier, while NPL’s utilisation more than doubled to 11.3pc from 5.0pc.
Profit contributions from power-sector associates increased 13.7pc YoY to Rs46.9bn in FY26, reflecting continued diversification by major sector players.
NPL’s expansion into the automobile sector contributed Rs1.3bn to earnings, while Hubco’s associate profit increased 10pc YoY, including Rs159 million contributed by BYD.
Kapco also continued to diversify beyond conventional power generation by entering the cement sector, as power companies increasingly seek additional revenue streams amid subdued electricity demand and changing dynamics in the power market.
