ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has released its annual Power Sector Industry Report for 2025, painting a grim picture of Pakistan’s electricity sector for the fiscal year 2024–25. The report underscores widespread shortcomings across the sector, citing persistent financial, operational, and structural challenges that hinder progress.
According to NEPRA, the cost of electricity has surged to unsustainable levels, primarily due to a heavy burden of taxes, surcharges, and duties on consumers. The report also reveals that most power distribution companies (DISCOs) failed to meet their loss-reduction targets, intensifying inefficiencies and financial strain within the industry.
Among the distribution companies, only the Tribal Electric Supply Company (TESCO) managed to achieve its loss-reduction goal in FY 2025. Conversely, major players like K-Electric, PESCO, HESCO, SEPCO, and KESCO struggled with extensive load shedding, low revenue recovery, and mounting debts. NEPRA pointed out that circular debt had ballooned by Rs 397 billion within a single year, largely due to ongoing losses in the distribution sector.
The report warned that unless urgent reforms are undertaken, the sector’s financial stability could be severely compromised. NEPRA also flagged the critical issue of unreliable and non-digital data, which hampers effective planning and decision-making in the power industry. Delays in issuing new connections, meters, and net metering approvals were highlighted as common problems across DISCOs, including K-Electric.
On the generation front, underutilization of coal-fired power plants in Thar was a major concern, with capacities operating at just 23 to 67 percent. Similarly, the Lahore–Matiari 4,000 MW transmission line was used only at 35 percent capacity, despite full payments for its operation.
NEPRA further noted that the transmission system was not being fully utilized and that delays in major projects, along with a lack of comprehensive log reports, hindered proper system review. The ongoing delays in major transmission projects further exacerbated the sector’s inefficiency.
The regulator called for immediate structural reforms, enhanced governance, increased digitalization, and better utilization of existing infrastructure to address the deep-rooted issues plaguing Pakistan’s power sector and ensure a sustainable future.
