Government Economic Team and IMF Set for Crucial Talks Next Week Focusing on Energy Reforms, Privatization, and Circular Debt Settlement
ISLAMABAD: Negotiations between the federal government’s economic team and the International Monetary Fund (IMF) are scheduled to commence next week, during which the delegation will be given comprehensive briefings on structural energy reforms, privatization roadmaps, and power and gas circular debt settlement plans, alongside anticipated revisions in basic electricity tariffs.
According to official sources, the upcoming talks will also feature detailed updates on overhauling transmission networks in both the electricity and gas sectors, alongside measures to expand private sector participation. The government has already finalized the regulatory framework for a competitive power market, though the formal auction process is yet to begin. Meanwhile, Expressions of Interest (EOIs) have been formally issued for the privatization of the Islamabad, Faisalabad, and Multan Electric Supply Companies, with domestic and international investors showing keen interest in acquiring the distribution companies.
Tariff Revisions in January 2027 and Subsidy Redirection
Official reports indicate that structural adjustments and revisions to the basic electricity tariff are expected in January 2027. Under proposed policy reforms, future electricity subsidies are planned to be channeled directly to deserving households through targeted income support programs. However, financial analysts note that full cost-recovery mechanisms and the gradual removal of cross-subsidies could exert upward pressure on consumer tariffs.
Furthermore, the government has set a strict target to cap the power sector’s circular debt at Rs1,614 billion.