Prime Minister Fan Replacement Program set to launch by end of July

ISLAMABAD: The Prime Minister’s Fan Replacement Program is scheduled to launch by the end of July, according to official sources.

Federal Finance Minister Senator Muhammad Aurangzeb reaffirmed the government’s commitment to energy efficiency and economic stability, emphasizing the importance of the fan replacement initiative.

Chairing a high-level meeting to assess the program’s readiness, Aurangzeb underscored Prime Minister Shehbaz Sharif’s particular emphasis on this initiative.

He described it as a crucial step towards promoting energy conservation, fostering financial inclusion, and generating broader economic benefits for the nation. The program is expected to officially launch its first phase by the end of July.

The Finance Minister stressed the potential of the program to positively influence consumer behavior by significantly reducing electricity consumption across households.

The initiative aims to replace 88 million old, inefficient fans with energy-efficient models nationwide, representing about 60% of the 147 million fans currently installed. This ambitious 10-year subsidized scheme is backed by a Rs2 billion fund and will operate under an “On-Bill Islamic Financing” model.

Under the program, consumers will be able to obtain energy-efficient DC fans through loans facilitated by commercial banks, with repayment integrated into their monthly electricity bills.

The government is providing a 10% first-loss guarantee for these loans, which will be offered at Karachi Interbank Offered Rate (KIBOR) plus 2%. This mechanism is designed to make the transition to energy-efficient appliances accessible to a wider range of households.

The National Energy Efficiency and Conservation Authority (NEECA) is leading the implementation, having finalized agreements with participating banks and integrated banking systems.

The Punjab Technology Investment Board and Power Information Technology Company are also playing facilitative roles. The program is projected to yield significant peak energy savings of 6,000–7,000 MW, which could substantially reduce Pakistan’s cooling load during peak summer months and alleviate the burden of capacity payments.

Minister Aurangzeb commended the proactive involvement of all stakeholders, particularly the banking sector, and directed that all necessary preparatory actions be finalized within the next two to three weeks to ensure the smooth launch of the program’s initial phase.

This initiative is a core component of the government’s broader energy and economic reform agenda, aimed at achieving sustainable development and providing relief to citizens by reducing their electricity bills.