Govt approves new power provision system to SEZs, industrial estates

January 16, 2025 (MLN): To accelerate the pace of industrial development, a new power provision system to the Special Economic Zones (SEZs) and industrial estates has been approved during the meeting of the Cabinet Committee on Energy.

The meeting, chaired by Prime Minister Muhammad Shehbaz Sharif, emphasized that the system would facilitate competitiveness among industries, thereby boosting industrial development and exports.

Under this system, the intervention of power distribution company officials in SEZs and Industrial Estates was ended, according to the press release issued.

A specific operations and management mechanism was being developed in this regard.

The Power Division and the National Electric Power Regulatory Authority (NEPRA) will implement this mechanism within the next 2 to 3 months.

Under the new system, zone developers would not require any additional license to supply electricity to industries within the zones.

The committee allowed their management to give electricity connections, collect bills, and handle other related matters themselves.

The prime minister, in his remarks, said that the industrial development was crucial for the national progress.

“With Allah’s grace, we are swiftly moving towards fulfilling the promise of ease of doing business”, he added.

“The provision of uninterrupted electricity will accelerate the pace of industrial development in the country.”, he further noted.

“With industries functioning, more job opportunities will be created, and exports will be enhanced”, the prime minister said.

He expressed the hope that the improved electricity transmission system at SEZs would enable industries to play a pivotal role in the country’s economic development.

The power division also presented a report on the circular debt for July to November 2024.

The positive outcomes of the Prime Minister's power sector reforms, which continued to emerge, were also discussed during the meeting.

A reduction in circular debt was recorded in the first five months of the current fiscal year compared to the previous year.

From July to November 2023, the circular debt had increased by Rs368 billion, whereas in the first five months of 2024, it was decreased by Rs12bn.

Thus, there had been an overall improvement of Rs380bn in circular debt compared to the previous fiscal year.

After a 4% increase, the recovery in the power sector had reached 96% in the first five months of the current fiscal year.

Losses in power distribution companies had decreased by Rs53bn following improvements, the meeting was told.

The meeting was further informed that the overall cost of electricity had been reduced by Rs4.64 per unit in the current fiscal year, made possible by reforms.

Addressing the meeting, the prime minister said that history bore witness that they had always brought the country out of darkness whenever given the opportunity.

He added that the process of power sector reforms was ongoing and the benefits were gradually emerging.

“We are taking steps to provide low-cost, environment-friendly, and uninterrupted electricity to the public”, he added.

We are working on revising agreements with IPPs to further reduce the cost of electricity for consumers,” he further noted.

The prime minister also commended the power division and relevant institutions for their efforts in reducing circular debt and implementing reforms in the sector.

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