A recent NEPRA report that also published in press has painted a concerning picture of the power sector. While we respect the Authority’s oversight role, the data presented does not accurately reflect the ground realities of the past fiscal year. The narrative of stagnation ignores a historic turnaround in operational and financial indicators achieved during FY 2025.
To ensure the public discourse is based on facts, we wish to present the complete picture, including the landmark reduction in circular debt and the tangible improvements delivered by DISCOs.
Notably, in FY 2024-25, the Circular Debt has been reduced by Rs. 780 billion — from Rs. 2,393 billion in FY 2024 to Rs. 1,614 billion in FY 2025. This unprecedented achievement was made possible through multiple coordinated efforts, including Improved DISCO performance (Rs. 193 billion), Successful LPI waiver negotiations with power producers (Rs. 260 billion), and Improvements in macroeconomic indicators (over Rs. 300 billion). The Rs. 193 billion contribution from improved DISCO performance is a direct outcome of the operational and financial discipline we have enforced on the ground.
Contrary to the impression of inefficiency, DISCOs achieved a remarkable increase in recovery performance. The recovery rate surged from 92.4% in FY 2024 to 96.6% in FY 2025 — a 4.2 percentage point jump. This improvement is the direct result of aggressive enforcement against defaulters and enhanced billing accuracy, and it is the primary driver behind the Rs. 193 billion contribution to circular debt reduction.
The most critical metric for sector health — the amount of revenue left uncollected — has seen a staggering turnaround. The financial burden of under-recovery was slashed by Rs. 183 billion, plummeting from Rs. 315 billion in FY 2024 to just Rs. 132 billion in FY 2025. This 42% reduction in financial bleeding is a major factor in slowing — and now reversing — the accumulation of circular debt.
Transmission and Distribution (T&D) losses decreased from 18.3% to 17.6% in just one year. This 0.7 percentage point reduction has already delivered savings of Rs. 11 billion by plugging inefficiencies in the system.
It is important to clarify that the current economic-based load shedding is fully in accordance with the National Electricity Policy and Plan to ensure the financial sustainability of the sector. Lifting AT&C-based load shedding without an alternative mechanism would impose an additional financial burden exceeding PKR 500 billion annually. The Government fully acknowledges this concern. In line with ongoing digitalization efforts, the transition towards transformer-level targeted load shedding is already underway.
We do not deny that legacy challenges remain. However, the numbers now speak for themselves: record-high recovery rates, a 42% cut in under-recoveries, measurable reduction in T&D losses, and a historic Rs. 780 billion reduction in circular debt — with DISCOs contributing Rs. 193 billion of that relief.
We urge NEPRA, policymakers, and the public to view these verified achievements as evidence that the reforms are working and that the power sector is firmly on the path to recovery.
