Pakistan Unveils Major Energy Reforms: 7,000MW Surplus Power to Be Sold at Competitive Rates

Islamabad, June 5, 2025 — Amid ongoing discussions with the International Monetary Fund (IMF), Pakistan’s government has announced ambitious energy sector reforms, including the sale of 7,000 megawatts (MW) of surplus electricity to the agriculture and industrial sectors at competitive, unsubsidized rates.

Federal Minister for Energy Sardar Awais Ahmad Khan Leghari confirmed on Wednesday that the government plans to offer surplus power at a flat rate of 7 to 7.5 cents per unit, aiming to optimize resource use while maintaining financial sustainability.

Speaking at a consultation organized by the Private Power and Infrastructure Board (PPIB) in Islamabad, Leghari emphasized that the plan to sell surplus electricity has been under negotiation with the IMF for the past six months, highlighting the government’s commitment to fiscal discipline and energy sector reform.

The minister also addressed concerns about solar energy policies, confirming that net metering for rooftop solar users will remain but will be complemented by a new, more transparent net billing system designed to balance consumer returns and grid stability.

“We are not discouraging solar adoption. This is about creating a balanced, transparent and sustainable framework that ensures fair returns for consumers while protecting grid stability and long-term energy planning,” Leghari said.

Additional reforms include the cancellation of 9,000MW of expensive and redundant power projects, and the introduction of levies on captive power producers to encourage their integration into the national grid and boost demand.

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Leghari highlighted recent tariff adjustments, noting that cross-subsidies amounting to Rs174 billion have lowered electricity costs for industries by up to 31% since June 2024, which has fueled increased industrial energy consumption. Prices for consumer categories have dropped between 14% and 18%.

Defending rooftop solar economics, the minister said most users recover their investment within three years if they consume at least 40% of the electricity generated, calling it a “robust business proposition.”

The government is also considering dynamic pricing models for energy buybacks to better reflect real-time market conditions, aiming to enhance efficiency and sustainability.