“Competition Commission Highlights Barriers to Private Investment in Pakistan’s Power Sector”

Islamabad: The Competition Commission of Pakistan’s report highlights key obstacles to private investment in the power sector, including the dominance of state-owned companies in electricity transmission and distribution, outdated infrastructure, and geographical challenges.

The report suggests that the National Electric Power Regulatory Authority (NEPRA) should implement its approved “commercial bilateral contract model” as soon as possible. This would allow electricity distribution companies to enter into agreements with any power plant for electricity supply, thereby improving competition.

To foster a competitive market, the report also recommends ending the role of the Central Power Purchasing Agency, investing in and upgrading the transmission infrastructure, and eliminating cross-tariff policies.

The report points out significant barriers to private sector participation, such as structural and regulatory constraints, as well as anti-competitive activities in the market. These challenges have hindered the entry of new companies, preventing effective protection of consumer interests.

According to the report, there is an urgent need for investment in power plants, transmission lines, and distribution facilities. The long distances between power generation facilities and demand centres result in high transmission losses, underscoring the need for significant infrastructure improvements.