Pakistan Power Sector Faces Rs. 1 Trillion Annual Losses

The recent developments in Pakistan's power sector reveal a stark contrast in reported performance, with the Power Division claiming significant improvements while the National Electric Power Regulatory Authority (NEPRA) highlights severe financial losses. The Power Division reported a historic reduction in circular debt by Rs. 780 billion, from Rs. 2,393 billion to Rs. 1,614 billion, attributing this to better operational discipline and improved billing accuracy among distribution companies (DISCOs). They noted, "DISCOs directly contributed Rs. 193 billion to this reduction through improved operational discipline," and emphasized a recovery rate increase from 92.4% to 96.6%. However, NEPRA's latest Performance Evaluation Report for FY 2024-25 presents a grim picture, indicating that the power distribution system incurred losses exceeding Rs. 1 trillion annually due to transmission inefficiencies and poor bill recovery. NEPRA reported that DISCOs suffered a cumulative loss of Rs. 472 billion, with Rs. 265 billion attributed to transmission and distribution (T&D) losses alone, stating, "None of the distribution companies met the prescribed T&D loss targets despite repeated directives." Additionally, the report highlighted that LESCO faced a staggering Rs. 35.17 billion loss due to electricity theft and a failing infrastructure, revealing that nearly one billion units of electricity were lost in the system.