PM Shehbaz approves overhaul of electricity plan to reduce tariffs

Prime Minister Shehbaz Sharif has approved a revised national electricity procurement plan for 2024–2034, halving the projected power purchases from 14,000MW to approximately 7,000MW.

The updated strategy is part of the government’s broader initiative to reform the energy sector and reduce reliance on expensive, long-term contracts.

Chairing a high-level meeting in Islamabad, the prime minister reviewed the revised Integrated Generation Capacity Expansion Plan (IGCEP), which now focuses on competitive, market-driven solutions rather than government-led power procurements. The changes are expected to result in estimated savings of $17 billion (Rs4.743 trillion).

In his remarks, the prime minister emphasized the importance of timely completion of strategic energy projects, including the Diamer Bhasha Dam, and reiterated the government’s commitment to transitioning towards a competitive electricity market to reduce tariffs further.

The revised IGCEP removes nearly 8,000MW worth of costly projects and prioritizes the use of indigenous resources and alternative energy sources such as solar, nuclear, and hydropower. The plan also outlines a gradual phase-out of capacity payments to power producers.

Power Minister Sardar Awais Leghari highlighted that the reforms aim to reduce financial pressure on consumers and move away from the single-buyer model by encouraging competition through market-based transactions.

He described the reform effort as more critical than renegotiations with Independent Power Producers (IPPs), emphasizing its focus on public welfare and fiscal responsibility.