SEZs, industrial estates: New power provision system endorsed

January 15, 2025 (MLN): In a move to boost industrial development, the Cabinet Committee on Energy has endorsed a new power provision system for Special Economic Zones (SEZs) and Industrial Estates during a meeting.

The committee, chaired by Prime Minister Shehbaz Sharif, authorized the supply of electricity to industrial estates and special economic zones at a unified rate.

It also granted their management the authority to handle electricity connections, bill collections, and other related matters, as outlined in a summary presented by the Power Division, according to the press release.

The meeting was informed that the new system marks a significant step by the government, under the leadership of the Prime Minister, towards advancing industrial development.

Under this system, the involvement of power distribution company officials in SEZs and Industrial Estates has been eliminated.

A dedicated operations and management mechanism is being developed, with the Power Division and NEPRA set to implement it within the next two to three months, as reported during the meeting.

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

The system would facilitate competitiveness among industries, thereby boosting industrial development and exports.

The prime minister, in his remarks, said that 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.

The provision of uninterrupted electricity will accelerate the pace of industrial development in the country.

With industries functioning, more job opportunities will be created, and exports would be enhanced,” the press release quoted the prime minister as saying.

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 with a report over the circular debt for July to November 2024.

The meeting was told that positive outcomes of prime minister’s power sector reforms continued to emerge as a reduction in circular debt, in the first five months of the current fiscal year compared to the previous year, was recorded.

In 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.

The meeting was informed that there had been an overall improvement of Rs380bn in circular debt compared to the previous fiscal year.

After a 4% increase, recovery in the power sector reached 96% in the first five months of the current fiscal year, while losses in power distribution companies decreased by Rs53bn due to improvements.

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, adding the process of power sector reforms was ongoing and the benefits were gradually emerging.

He further mentioned that we are taking steps to provide low-cost, environment-friendly, and uninterrupted electricity to the public.  

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

The meeting was attended by Deputy Prime Minister and Minister for Foreign Affairs Ishaq Dar, along with Ministers Ahsan Iqbal, Ahad Khan Cheema, Sardar Owais Khan Leghari, Minister of State Ali Pervaiz Malik, Special Assistant Muhammad Ali, Prime Minister’s Coordinator Rana Ahsan Afzal, and other senior officials.

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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