Pakistan Gets IMF Approval for Reducing Electricity Prices

The International Monetary Fund (IMF) has given a green signal for reducing electricity prices in Pakistan, according to sources familiar with the matter. NEPRA and the Ministry of Energy have been authorized to make decisions in consultation with relevant stakeholders. Sources told ProPakistani that electricity prices could be reduced by Rs. 1 to Rs. 2 per unit, with the final decision expected next month. However, the IMF has expressed serious concerns over the poor performance of electricity distribution companies (DISCOs). The Fund stated that complete improvement in the power sector cannot be achieved without addressing the inefficiencies of these distribution companies. During recent discussions, Pakistani officials shared a privatization plan for several DISCOs, including IESCO, FESCO, and GEPCO, which is scheduled to be implemented by November 2025. Before privatization, the regulatory framework, tariff structure, and balance sheets of these companies will be clarified, according to the briefing. Sources revealed that 17 preliminary measures will be completed for the DISCOs before privatization. In the second phase, MEPCO, LESCO, and HESCO will be privatized. The IMF has warned that without privatizing the distribution companies, the power sector’s performance will remain unsustainable. The Fund also expressed concerns over violations of amendments to the NEPRA Act. In addition to power sector reforms, the IMF and World Bank delegations held sessions on agricultural income tax. Sources added that another IMF delegation might visit Pakistan after Eid for discussions on governance issues. Today’s talks are expected to focus on the Federal Board of Revenue (FBR), agricultural income tax, and property sector taxation. Important negotiations regarding the Sovereign Wealth Fund and controlling circular debt are also scheduled for today.