The federal government is exploring the option of adjusting reconciled outstanding electricity dues of provincial governments against their respective shares under the National Finance Commission (NFC) award. This follows a significant 40% reduction in power sector losses, bringing the figure down to Rs221 billion during the July–March period of the current fiscal year.
During a meeting of the Economic Coordination Committee (ECC) of the Cabinet, the Power Division presented the latest performance data of power distribution companies (DISCOs). The figures showed mixed results: although there was a slight increase in distribution losses, bill recovery rates improved compared to the previous year.
Despite this progress, the ECC urged the Power Division to further enhance the financial health of these companies, noting that both losses and recoveries still fell short of targets set by the National Electric Power Regulatory Authority (NEPRA).
Federal Minister for Power Sardar Awais Leghari told The Express Tribune that losses were significantly lower than anticipated—Rs221 billion instead of the projected Rs390 billion—representing a 40% year-on-year improvement. He attributed the progress to newly appointed boards of most DISCOs, except Hyderabad and Sukkur, which were left unchanged under an understanding with the Pakistan Peoples Party (PPP).
Leghari added that while recovery from private sector consumers had improved, the ministry is now seeking support from the Finance Ministry to collect outstanding dues from federal and provincial entities. As of September last year, provinces owed approximately Rs150 billion in unpaid electricity bills: Sindh topped the list with Rs59.7 billion, followed by Balochistan (Rs39.6 billion), Punjab (Rs38 billion), and Khyber Pakhtunkhwa (Rs8.9 billion).
A Finance Ministry official confirmed that only reconciled and mutually agreed dues can be deducted from provincial NFC allocations.
Performance data showed that line losses slightly increased from 15.14% to 15.7% year-over-year, driven by underperformance in Quetta, Sukkur, Hyderabad, Gujranwala, and Lahore. Meanwhile, companies in Faisalabad, Islamabad, Multan, Peshawar, and the tribal districts managed to reduce losses. Bill recoveries rose from 92% to 93.8%, though Hyderabad, Sukkur, and the tribal districts continued to lag behind.
The circular debt also remained stable. Instead of a projected Rs411 billion increase, it grew by only Rs2 billion over nine months, keeping total circular debt just under Rs2.4 trillion.
The ECC also reviewed a summary from the Petroleum Division requesting an extension of sovereign guarantees for Rs50 billion in financing obtained by Sui Northern Gas Pipelines Limited (SNGPL) to cover LNG payments. Based on the company’s improved cash flows, the ECC approved the extension until June 2026.
In a separate development, the ECC approved Rs55 billion for the solarisation of 27,000 agricultural tube-wells in Balochistan—a project announced by the Prime Minister on July 2, 2024. The federal government will provide a 70% subsidy. Of the total, Rs14 billion has already been disbursed, while Rs24.5 billion was approved during Monday’s meeting.
The ECC directed the Power Division to ensure strict implementation of the project, particularly the disconnection of tube-wells from the national grid and the removal of transformers and associated infrastructure from each batch of feeders. The Power Division has been asked to report progress on the project by July.
