ISLAMABAD – The International Monetary Fund (IMF) has approved a proposal presented by Pakistan authorities to reduce electricity prices to provide relief to masses in the country.
The agreement was reached during negotiations between Pakistan and the IMF for a $1 billion tranche under a $7 billion loan programme. The proposal was presented by energy sector officials during a meeting with the visiting delegation.
Reports said Pakistani authorities have convinced the IMF to cut the electricity rate by Rs2 per unit, while a lengthy session was held with the delegation regarding reducing the base tariff by Rs1.5 to Rs2.
The reduction in the basic electricity tariff is expected to be implemented starting in April, but before reducing the tariff, Pakistani authorities are required to submit a new comprehensive plan for the privatization of distribution companies.
The IMF expressed dissatisfaction with the current privatization plan for electricity distribution companies and also showed concern about their losses.
The IMF has emphasized that the performance of electricity distribution companies must be improved in all circumstances.
Reports revealed that the government has presented a plan to privatize three DISCOs to the IMF. In the first phase, the privatization of IESCO, FESCO, and GEPCO will take place, while in the second phase, the privatization of MEPCO, LESCO, and HESCO will occur.
