The Pakistan government announced a landmark shift in its energy sector by launching the country’s first-ever deregulated electricity market. Set to commence in March 2026, the move aims to satisfy a key International Monetary Fund (IMF) requirement to foster competition and reduce the circular debt. Initially, the market will auction 200 MW of power, specifically targeting B3 and B4 industrial consumers. In a major relief for the manufacturing sector, capacity charges, which typically inflate energy bills, will be set to zero for this segment.
Pakistan plans cheaper industrial electricity under IMF reforms, moving toward a deregulated power market to cut costs and boost competitiveness.#techjuice #electricity #pakistan #imf pic.twitter.com/oOjjMnaJOO
— TechJuice (@TechJuicePk) February 25, 2026
The new system operates through independent market operators who will manage trading between power producers and large-scale consumers with a minimum demand of 1 MW. Under this model, industrial units will pay only installation charges to power companies, while distribution companies (Discos) will collect a fixed “wiring fee” for grid usage. Electricity prices are projected to be significantly lower than traditional rates, with charges estimated at Rs 6 per unit for B3 consumers and Rs 9 per unit for B4 consumers.
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Government officials expect the total market supply to scale up to 800 MW over the next four years. By allowing industries to purchase the “cheapest electricity ever” available on the open market, Pakistan hopes to boost export-oriented manufacturing and enhance global competitiveness. This reform marks a departure from the state-controlled pricing model, signaling a broader push toward energy sector privatization and efficiency.
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