PM approves new power system for SEZs

Industrial estates to gain direct electricity provision eliminating intervention by power companies

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ISLAMABAD:

Prime Minister Muhammad Shehbaz Sharif, chairing a meeting of the Cabinet Committee on Energy on Tuesday, approved a new power supply system for Special Economic Zones (SEZs) and Industrial Estates to accelerate industrial development.

The committee approved a proposal by the Power Division to allow SEZ and Industrial Estate management to handle electricity connections, billing, and related matters independently at a single supply point, eliminating intervention by power distribution companies. The meeting, attended by Deputy PM Ishaq Dar, Ministers Ahsan Iqbal, Ahad Khan Cheema, Sardar Owais Khan Leghari, Minister of State Ali Pervaiz Malik, Special Assistant Muhammad Ali, and other senior officials, was briefed on this development.

The new system, considered a major step for industrial growth, aims to streamline electricity operations and promote competitiveness among industries within SEZs. The Power Division and National Electric Power Regulatory Authority (NEPRA) were directed to implement the new mechanism within two to three months. Additionally, zone developers will no longer require additional licenses to supply electricity within SEZs.

The prime minister stressed the importance of industrial progress for national development. "Uninterrupted electricity will accelerate industrial development, create jobs, and boost exports," he said, expressing optimism that the improved system would enhance SEZs' role in economic growth.

During the meeting, the Power Division presented a report on the circular debt for July to November 2024, highlighting positive outcomes of the government's power sector reforms. Compared to the previous year, circular debt increased by Rs368 billion during the same period in 2023 but decreased by Rs12 billion in 2024, reflecting a net improvement of Rs380 billion compared to the previous fiscal year.

Additionally, power sector recovery rose by 4%, reaching 96%, while distribution company losses decreased by Rs53 billion. The overall cost of electricity was reduced by Rs4.64 per unit during the current fiscal year, attributed to ongoing reforms.

The prime minister praised the efforts of the Power Division and related institutions for their role in reducing circular debt and advancing reforms. "History bears witness that we have always lifted the country out of darkness whenever given the opportunity," he remarked.

He reaffirmed the government's commitment to providing low-cost, environment-friendly, and uninterrupted electricity, noting ongoing efforts to revise agreements with IPPs to further reduce costs for consumers.