Pakistan’s Finance Minister Muhammad Aurangzeb has requested $1 billion from the International Monetary Fund’s (IMF) Resilience and Sustainability Trust to address climate risks and accelerate the country’s energy transition.
Emphasising the importance of renewable energy, the minister during the IMF annual meetings highlighted its potential to provide cheaper electricity, critical for the success of a competitive market regime.
Pakistan’s power sector’s circular debt has surged to Rs2.66 trillion ($9.5 billion), primarily due to inefficiencies in the power distribution network and unfavorable contracts with independent power producers (IPPs).
The government aims to reform the power sector by optimizing IPP costs, evaluating fiscal burdens on consumers, and unbundling electricity to foster a competitive market, enhancing efficiency and lowering prices.
The government plans to privatise electricity distribution companies and improve governance to enhance operational efficiency and ensure more affordable prices for consumers.
(Owais Rawda)
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