The International Monetary Fund (IMF) has given its approval to the Pakistan government’s proposal to reduce electricity prices, offering a reassuring nod amidst complex negotiations.
The discussions between Pakistan’s astute economic team and the discerning IMF delegation are now reaching a critical climax, as Pakistan aims to secure the eagerly awaited second tranche of over $1 billion under the expansive $7 billion Extended Fund Facility (EFF) programme.
In the midst of these pivotal talks, officials from the Ministry of Energy engaged in rigorous discussions with the IMF concerning the intricacies of tariff rebasing.
According to inside sources, the IMF has provided its all-important ‘green light’ to lower electricity rates, granting NEPRA and the Ministry of Energy the authority to finalize the decision. A notable proposal to decrease base tariffs by up to Rs2 per unit starting in April or May was put forth before the IMF.
Furthermore, authorities shared with the IMF a comprehensive privatisation strategy for power distribution companies (DISCOs). The IMF, however, expressed grave concerns regarding delays in the privatisation of two DISCOs by January, underscoring persisting inefficiencies within the power sector. \Moreover, the IMF stood in disagreement over proposed amendments to the NEPRA Act by the Ministry of Energy.
Intense negotiations concerning the circular debt in the power sector, tax policies, and discussions on the sovereign wealth fund are set to continue today. \n
Another delegation from the IMF is expected to visit Pakistan following Eid, where governance-related dialogues will take center stage.