Pakistan’s power sector is in deep need of reform. The sector suffers from chronic shortages not because of a lack of supply but due to the financial woes of the distribution companies operating throughout Pakistan. Of the electricity sold for use across the country, only 71% is recovered through bills. Such large losses risk collapsing the sector if left unaddressed.
The Government of Pakistan has recently formed a Task Force on Energy Reforms to work closely with the Ministry of Energy and the Prime Minister’s office to develop a series of reforms which guarantee the availability, affordability, and sustainability of the sector. This is the first serious step taken to work towards addressing these challenges in the power sector.
Building on from conversations directly with the Energy Committee of the Prime Minister’s office, we have been asked to help the committee think through potential ideas for addressing one of the sector’s largest problems: reducing the losses that occur in the distribution of electricity. From the initial analysis we conduct we plan to develop a series of interventions, together with the ministry and the task force, to address the challenges of circular debt.