Islamabad
The Federation of Pakistan Chambers of Commerce and Industry’s Businessmen Panel (BMP) has urged the government and National Electric Power Regulatory Authority (Nepra) to ensure that the proposed $58 billion investment under the 11-year Integrated System Plan (ISP) does not translate into another burden on electricity consumers and the already struggling trade and industrial sector.
BMP Chairman and former FPCCI president Mian Anjum Nisar said that expansion of the power generation and transmission system was essential for meeting the country’s future energy requirements, but every new investment must be subjected to strict economic and technical scrutiny to ensure that its cost does not further push up electricity tariffs.
He said Pakistan’s industry was already operating under exceptionally high energy costs and could not afford another round of tariff pressures through capacity payments, transmission charges, surcharges or other adjustments.
Any long-term power plan, therefore, should focus not only on increasing generation capacity but also on bringing down the overall cost of electricity.
His remarks came after Nepra conditionally approved the Integrated System Plan (ISP) 2025, involving an estimated total investment of about $58 billion in power generation and transmission over the 2025-35 planning period.
According to Nepra’s decision, the revised base/recommended case envisages addition of 26,045 megawatts of generation capacity, including 17,485MW committed capacity and 8,560MW optimised capacity, while 2,577MW of existing capacity is planned for retirement.
The resulting installed capacity is projected at 62,657MW, including 8,120MW of net-metering capacity.
The projected cost of additional generation capacity stands at about $47.08 billion, while ongoing and committed transmission projects require an estimated $4.6 billion and newly proposed transmission expansion projects another $6.05 billion, taking the cumulative transmission investment requirement to approximately $10.65 billion.
Anjum Nisar said such a massive investment plan required a transparent assessment of its likely impact on the cost of electricity before implementation. He said the government must clearly explain how the investment would be financed and how much of its financial burden could ultimately be passed on to consumers.
“The country needs reliable and affordable electricity, not merely additional capacity. The success of any power plan should be measured by whether it reduces the cost of electricity and improves industrial competitiveness,” he said.
The BMP chairman recalled that the business community had repeatedly raised concerns over high capacity payments, expensive power purchase arrangements and inefficiencies in the electricity distribution system. He said these structural issues needed to be addressed before consumers were asked to bear additional costs.
He said the government should ensure that new generation projects were selected on the basis of genuine demand, competitive costs and long-term economic viability. Similarly, transmission investments should be prioritised according to actual requirements so that unnecessary or underutilised infrastructure did not create additional financial liabilities.
Anjum Nisar also welcomed Nepra’s decision to withhold approval for the proposed $900 million investment in Battery Energy Storage Systems (BESS) until a comprehensive technical and economic study establishes their requirement, optimum capacity, operational use and cost-effectiveness.
He said this approach should be applied to all major investments in the power sector. “Every dollar invested in the energy sector must generate economic value and should not become another fixed cost for consumers,” he said.
The BMP chairman further stressed the need for resolving inefficiencies of distribution companies, reducing line losses, controlling power theft and improving governance in the power sector. He said losses arising from poor management and system inefficiencies should not continuously be transferred to honest consumers through higher tariffs.
He said the conflicting positions of the Independent System and Market Operator (ISMO) and Power Planning and Monitoring Company (PPMC) regarding the impact of ISP-2025 on consumer-end tariffs also warranted clarification.
According to the Nepra decision, the regulator had raised concerns over the assumptions and changes incorporated into the plan and had also questioned the process through which major modifications were made. Nepra members recorded separate or dissenting observations on several aspects of the planning document, including project selection and the constitutional role of the Council of Common Interests (CCI).
Anjum Nisar said the concerns raised by the regulator should be addressed transparently before the country committed itself to such a large investment programme.
He said Pakistan’s industrial sector was facing intense competition in international markets and could not remain competitive with electricity costs substantially higher than those of regional competitors. Affordable and reliable energy, he added, was essential for reviving manufacturing, attracting investment, increasing exports and creating employment.
He urged the government to maintain close consultation with chambers of commerce and industry while finalising major energy policies and ensure that future power-sector investments were aligned with the requirements of industry and the broader economy.
