ISLAMABAD: The International Monetary Fund (IMF) has approved a proposal submitted by Pakistani authorities to reduce electricity prices to provide relief to the people in the country.
The agreement was reached during negotiations between Pakistan and the IMF for a $1 billion tranche under a $7 billion loan program. The proposal was presented by energy sector officials during a meeting with a visiting delegation.
Reports said that Pakistani authorities have convinced the IMF to reduce electricity rates by Rs2 per unit, while a long session was held with the delegation regarding the reduction in the basic tariff from Rs1.5 to Rs2.
The reduction in basic electricity rates is expected to be implemented from April, however, before the tariff reduction, Pakistani authorities will have to present a new comprehensive plan for the privatization of distribution companies.
The IMF expressed dissatisfaction with the current plan to privatize electricity distribution companies and also expressed concern over their losses.
The IMF has stressed that the performance of power distribution companies must be improved at all costs.
Reports have revealed that the government has submitted a plan to the IMF for the privatization of three DISCOs. In the first phase, IESCO, FESCO and GEPCO will be privatized, while in the second phase, MEPCO, LESCO and HESCO will be privatized.