Islamabad, Mar 11, 2025: The International Monetary Fund (IMF) has reportedly approved a reduction in electricity tariffs for Pakistan, as per sources close to the matter.
The National Electric Power Regulatory Authority (NEPRA) and the Ministry of Energy have been given the authority to decide on the matter after consulting relevant stakeholders.
It is anticipated that power rates could drop by Rs. 1 to Rs. 2 per unit, with an official announcement expected next month.
Despite this positive development, the IMF has raised serious reservations about the underperformance of electricity distribution companies (DISCOs).
The Fund emphasized that substantial improvements in the power sector are unattainable unless the operational inefficiencies of these companies are effectively addressed.
During recent dialogues, Pakistani authorities presented a strategy for privatizing multiple DISCOs, including IESCO, FESCO, and GEPCO, with implementation planned by November 2025.
Prior to privatization, adjustments in regulatory frameworks, tariff structures, and financial accounts of these firms will be carried out, according to officials.
Insiders disclosed that 17 preliminary measures must be executed before initiating the privatization process. The second phase will involve the privatization of MEPCO, LESCO, and HESCO.
The IMF has cautioned that without privatization, sustaining the efficiency of the power sector will remain a challenge.
Additionally, the IMF has expressed concerns regarding breaches of amendments to the NEPRA Act.
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Alongside reforms in the energy sector, discussions between IMF and World Bank representatives also included deliberations on agricultural income tax.
Sources suggest that another IMF delegation may visit Pakistan after Eid to engage in further talks on governance issues.
We expect today’s discussions to center around the Federal Board of Revenue (FBR), agricultural taxation, and the real estate sector’s tax policies.
Officials will also hold key negotiations on the Sovereign Wealth Fund and strategies to mitigate circular debt.
