Pakistan proposes net metering tariff cut amid IMF energy review

The Pakistani government has proposed reducing net metering tariffs, lowering the surplus solar electricity purchase rate from PKR 27 (~$0.10) to PKR 10 (~$0.04) per kWh. The plan, shared with the International Monetary Fund (IMF), addresses concerns that rising off-grid solar adoption could impact power sector efficiency. Pakistan’s energy sector includes 104 operational power plants, with 18 state-owned and 86 run by independent power producers (IPPs). According to the government, five inefficient plants have been decommissioned, and tariffs for 14 IPPs, including eight bagasse-based plants, were renegotiated. Talks with the remaining IPPs are ongoing, with further cost reductions expected. Officials have also stated that PKR 1.3 trillion (~$4.64 billion) in financial capacity, created by lower debt servicing costs, is under consideration for reducing baseline electricity tariffs. These measures aim to restructure energy pricing, regulate solar expansion, and address IMF concerns regarding the stability of Pakistan’s power sector.