In a move to tackle rising electricity costs, the Pakistani government has proposed a plan to the International Monetary Fund (IMF) that could lead to a reduction of Rs6 per unit in electricity prices. This plan, which was put forward recently, involves a substantial injection of Rs2.8 trillion into the energy sector. However, concerns have been raised about the plan’s reliance on uncertain sources of funding, which may result in delays or even prevent the IMF’s approval.
Despite these efforts, challenges have already emerged. While the federal government has suggested that Rs1.4 trillion of the required funds should be provided by all four provinces, including Khyber Pakhtunkhwa (K-P), this has been met with resistance. Specifically, the K-P government, led by Pakistan Tehreek-e-Insaf (PTI), has declined to provide its portion of the funds.
Over the weekend, discussions were held between Pakistani officials and IMF representatives regarding this proposal. Unfortunately, an agreement was not reached during these talks. Instead, the IMF has requested more detailed information before making any final decisions.
Moreover, the government has put forward another suggestion aimed at reducing electricity costs by Rs5.80 per unit. This could be accomplished through various measures, including renegotiating contracts with both local and government-owned power producers, shutting down inefficient power plants, and addressing the existing debt of Rs2.7 trillion.
