On Wednesday, the Cabinet Committee on Energy approved the establishment of an independent multiplayer market for electricity generation and purchase, aimed at promoting competition and reducing the government’s exclusive role as the sole electricity buyer.
The meeting, chaired by Prime Minister Shehbaz Sharif, also endorsed the formation of an Independent System and Market Operator (ISMO).
This proposal will be submitted to the federal cabinet for final approval and subsequently registered with the Securities and Exchange Commission of Pakistan under the Companies Act of 2017, as noted in a press release from the Prime Minister’s Office.
The ISMO aims to transform the electricity market into a transparent and competitive arena, enabling consumers to purchase power from suppliers beyond the traditional distribution companies.
It will prioritize long-term planning to generate affordable electricity and enhance transmission efficiency, with the goal of lowering power prices and tackling the persistent issue of circular debt.
The ISMO Board will comprise experts from the power sector. During the meeting, officials were updated on the ongoing challenges posed by circular debt, which could reach Rs2.8 trillion despite a 51% hike in electricity prices.
Prime Minister Shehbaz underscored the urgent need for reforms within the power sector, calling for immediate action to address issues like power theft and losses. He urged officials to adopt modern technologies to facilitate these reforms and mitigate theft.
Federal ministers, including Muhammad Aurangzeb, Ahsan Iqbal, Ahad Khan Cheema, Sardar Awais Ahmed Leghari, and Dr. Musaddik Malik, as well as Minister of State Ali Pervaiz Malik, were present at the meeting, highlighting the collective commitment to tackling the challenges in the energy sector.
