The Pakistan Power Reforms Project was kicked off at an event co-hosted by the School of Business Studies, IBA, and the MInistry of Energy (Power Division). The Federal Minister of Power, Sardar Awais Ahmed Khan Leghari gave a keynote address, in which he identified fault lines, and a clear roadmap for reforms that can improve efficiency of the power sector, catalyzing industrial, and economic growth in the process. The Minister clearly stated that structural reforms are multifaceted, and the results of the same would be apparent in a few months. The Power Division is actively working towards improving governance standards of distribution companies, while pushing for a radical transformation of transmission infrastructure to improve efficiency, and reduce losses in the process. On the issue of surplus generation capacity, it was mentioned that plans are in place to stimulate industrial demand through various interventions, such that we can accelerate industrial, and economic growth in the process. On the issue of tariffs, it was made clear that front-loaded debt repayments contributed significantly to capacity charges, and addressing the same through various policy levers can result in rationalized prices across the board. More importantly, it remains extremely important that we actively move towards a competitive market regime, where electrons can be traded between buyers, and sellers, such that efficiency is rewarded, moving away from a cost-plus regime focused on a single-buyer model. The Minister highlighted that a policy that encourages adoption of Electric Vehicles will be announced soon, that will accelerate adoption of Electric Vehicles in the country, particularly 2-wheelers, and 3-wheelers. Such an intervention will not just increase demand for electricity, but also reduce household expenditure on transport, as well as significantly reducing import bill associated with fuel imports. It was also mentioned that Pakistan has one of the cleaner energy mixes in the world, with more than 55 percent of electricity being generated from clean sources, such as hydel, nuclear, and renewables. More importantly, the same would exceed 70 percent within a few years. Similarly, almost 75 percent of electricity generated in the country is through indigenous sources, and the same is expected to increase to more than 90 percent over the next few years. The event ended on a positive note, with a clear focus on a reform agenda that will result in improved governance standards, and better efficiency in generation, transmission, and distribution of electricity –resulting in lower price of electricity, which can trigger industrial, and economic growth in the process.
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