Talks between Pakistan and the International Monetary Fund (IMF) for the second economic review are in progress, with the energy sector as the main agenda. The discussions cover Pakistan’s circular debt, electricity losses, power theft, and reforms in the power distribution system.
According to sources, the IMF has asked the Government of Pakistan to immediately stop the inflow of circular debt in the energy sector. The IMF also called for an effective plan to reduce electricity losses, curb power theft, and present clear proposals to cut capacity charges. These steps are part of the ongoing Pakistan IMF economic review talks.
Pakistani officials assured the IMF that they will clear the circular debt before the agreed six-year deadline. They confirmed an agreement with banks for a loan of Rs. 1,225 billion to manage payments without adding any new burden on electricity consumers. The government will make payments through the existing surcharge of Rs. 3.23 per unit.
Officials briefed the IMF that surplus electricity to utilize in the industrial sector and crypto mining to share the energy load. The IMF urged Pakistan to speed up energy sector reforms and improve the governance of power distribution companies (Discos) to stabilise the system and reduce future losses.
