The Cabinet Committee on Energy has taken a major step towards reforming Pakistan’s power sector by approving the establishment of an independent electricity market.
This move aims to end the government’s monopoly as the sole buyer of electricity, encourage competition, and help reduce costs and circular debt.
In a meeting chaired by Prime Minister Shehbaz Sharif, the committee gave its principal approval for the creation of an Independent System and Market Operator (ISMO). The establishment of ISMO will later be formally approved by the federal cabinet and registered under the Companies Act 2017, according to a press release from the Prime Minister’s Office.
The ISMO is designed to introduce transparency and competition into the electricity market, allowing consumers to purchase power from suppliers beyond traditional distribution companies. This transition is expected to result in long-term, low-cost electricity production and transmission, which will ultimately reduce power prices and help address the ongoing circular debt problem.
The ISMO board will include power sector experts who will help guide these important reforms. The committee discussed the current issues of circular debt, with Prime Minister Shehbaz Sharif emphasizing the urgency of reforming the power sector. He directed immediate action to reduce power theft and losses, and called for disciplinary measures against distribution company employees involved in electricity theft.
The Prime Minister also urged the adoption of modern technology to implement these reforms and tackle electricity theft effectively.
Federal ministers Muhammad Aurangzeb, Ahsan Iqbal, Ahad Khan Cheema, Sardar Awais Ahmed Leghari, Dr. Musaddik Malik, and Minister of State Ali Pervaiz Malik were present at the meeting, along with other committee members. The government hopes that these changes will promote a more efficient and cost-effective energy market for the country.
