Prime Minister Shehbaz Sharif has announced plans to establish a free market for electricity generation in Pakistan in the near future, aiming further reduction the tariffs and to enhance competition and improve efficiency in the power sector.
"The establishment of a competitive electricity market will not only enable power to be supplied on a fair and efficient basis, but it will also play a vital role in bringing down prices for consumers," PM Shehbaz said.
He was chairing a meeting in Islamabad on Thursday regarding the Integrated Generation Capacity Expansion Plan 2024-20234, focusing on sustainable reforms in the energy sector and lowering electricity tariffs.
During the meeting, the Prime Minister stressed that delays in energy projects would no longer be tolerated. He announced that a free market for electricity production would soon be established in the country, enabling a competitive and sustainable supply of power. This reform, he noted, is expected to lead to additional reductions in electricity rates.
Highlighting recent developments, the Prime Minister pointed to the recent cut of approximately Rs. 7.50 per unit in electricity prices and affirmed the government’s commitment to long-term reforms that ease the financial burden on the public.
Officials briefed the Prime Minister on ongoing reforms within the energy sector. The IGCEP was reassessed on his instructions, revealing several areas for improvement. It was revealed that a framework has been created to enable competitive bidding and electricity procurement at the lowest possible cost over the next decade.
The plan now excludes high-cost projects with a combined capacity of 7,967 megawatts. Additionally, completion timelines for remaining generation projects are being revised. These changes are expected to yield savings of around $17 billion.
Officials further informed the meeting that local and alternative energy sources—such as solar, nuclear, and hydropower—will be prioritised over imported fuels, a move that will conserve valuable foreign exchange reserves.
The government also plans to gradually phase out capacity payments to power producers, aligning with its broader cost-saving strategy.
Prime Minister Shehbaz praised Minister for Power Sardar Awais Ahmed Khan Leghari and his team for saving Rs. 4,743 billion through the revised energy roadmap, calling it a "historic achievement" in Pakistan’s power sector.
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