Caretaker Muhammad Ali, the federal minister of energy, stated on Monday that adding Thar coal and renewable energy sources to the energy mix will increase the energy mix and lower power rates.
The minister told the media that the government was considering privatizing all former Wapda distribution businesses (DISCOs) under a Long-Term Concession Agreement (LTCA) that would last for 20–25 years. The federal cabinet, he said, will make the ultimate choice.
The minister responded to a question by saying there will be load shedding for gas in the upcoming winters, but every effort would be taken to keep the shortfall from being worse than it was the year before.
Although gas prices will shortly increase, 60% of low-income users won’t have to pay more than Rs. 500 per month as a result. He did point out that huge users will see a sharp increase in gas prices.
The focus will now be on LTCAs for ten power firms, the minister said, adding that the Power and Privatization Divisions held discussions with the World Bank and the International Finance Corporation (IFC).
He continued by saying that 14 power sector units, including the 525 MW and 747 MW Guddu LNG-based power facilities, had already received prior administrations’ approval for privatization.
A summary would be proposed to the federal cabinet for approval, and authorities would take into account LTCAs, privatization, and the transfer of DISCOs to the provinces.
According to Muhammad Ali, LTCAs would adhere to industry-wide best practices for private sector management in relation to investment and performance goals, with contractors receiving payments depending on the advancements they achieve. The identical LTCA design will be applied by all DISCOs, he said.
Meanwhile, the electricity division will enhance the administration of DISCOs by altering the Board of Directors as necessary, in cooperation with other stakeholders. The caretaker setup, the minister said, may not be able to complete its tasks within its term, but it will at least start and move the process forward.