Pakistan Ends Government Electricity Purchases

Pakistan is transitioning to a competitive electricity market within two months. Energy Minister Owais Leghari confirmed that the government will exit direct government electricity purchases, paving the way for open energy trade, wheeling charges, and a privatized, transparent market structure. NEPRA and LESCO are expected to play regulatory roles under this new model.

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What Will Change with Pakistan’s Competitive Energy Market?

In a major energy sector reform, the Government of Pakistan will no longer purchase electricity directly. Energy Minister Owais Leghari announced that within the next two months, Pakistan’s first-ever Competitive Trading Bilateral Contract Market (CTBCM) will be officially implemented.

“The government’s role will be limited to regulating the market; power purchase agreements will be handled through open competition,” Leghari stated during a meeting with World Bank regional leaders.

This shift will empower private sector energy producers and distributors to engage in free market trading — a model already successful in several developing economies.

What Are “Wheeling Charges” & How Will They Affect Consumers?

The upcoming market model introduces wheeling charges, allowing energy producers to use national transmission lines to sell electricity directly to consumers, including industrial and commercial users.

Under this model:

NEPRA will regulate transmission costs and access
Independent power producers (IPPs) can sell to multiple buyers
Large consumers can bypass DISCOs (like LESCO) if they choose

This change aims to reduce government expenditure, improve transparency, and introduce competitive pricing — potentially lowering consumer costs over time.

Illustration symbolizing NEPRA as a balancing authority in Pakistan's energy sector, showing a scale with energy producers on one side and consumers on the other, representing fair Government Electricity Purchases and regulation.

World Bank Backs Reforms, Praises Energy Policy Shift

The announcement came during a meeting between Minister Leghari and World Bank Vice President for South Asia, Osman Dion, who led a regional delegation to review Pakistan’s energy reforms.

The delegation was briefed on net metering policies, energy privatization progress, and regulatory upgrades
The World Bank commended Pakistan’s commitment to long-term, market-oriented reforms

“A healthy energy sector is vital to national growth. The World Bank will continue to support Pakistan’s transition,” said Dion.

What Role Will NEPRA and LESCO Play Going Forward?

As the government exits power procurement, NEPRA (National Electric Power Regulatory Authority) will strengthen its role as the market regulator. It will:

Monitor compliance with the competitive trading framework
Enforce pricing, access, and grid safety standards
Set and adjust wheeling charges and market settlement rules

Meanwhile, LESCO (Lahore Electric Supply Company), along with other DISCOs, will:

Transition into grid facilitators and regional distributors
Focus on billing transparency, customer service, and infrastructure upgrades

For instance, users can already access their electricity usage history and check their LESCO bill online, a digital convenience that reflects growing modernization in the power sector.

Related Developments: NEPRA & LESCO in the Spotlight

1. NEPRA Penalizes DISCOs for Excessive Load Shedding

In a recent audit, NEPRA issued show-cause notices to multiple power distribution companies, including LESCO, for failing to meet service level benchmarks and engaging in unannounced load shedding during peak summer months.

2. LESCO Introduces Smart Metering Trials

LESCO has begun testing smart meters in select urban areas, enabling real-time monitoring of electricity usage. The move is seen as a step toward enabling time-of-use billing, which aligns with the market liberalization model.

Why This Matters for Pakistan’s Energy Future

This shift toward a competitive electricity market is expected to:

Reduce dependency on expensive long-term contracts
Empower private investment in renewables and hybrid grids
Decrease circular debt by aligning payments with real-time usage
Improve billing accuracy for both large-scale and household consumers

These reforms also aim to reduce load shedding by distributing generation responsibilities across multiple private-sector actors allowing faster response times and capacity upgrades.

Want to learn how to check your electricity charges or download your monthly invoice? Visit our guide on how to check your lesco bill online for easy access and payment tracking.

FAQs About Pakistan’s Competitive Energy Market

When will the competitive energy market launch in Pakistan?
Within two months, according to Energy Minister Owais Leghari.

Will consumers still get electricity from companies like LESCO?
Yes, but LESCO may act more as a distributor rather than sole supplier.

What are wheeling charges?
Fees charged for using the national grid to transport electricity between buyer and seller.

Who will regulate the new system?
NEPRA will be the main regulatory authority overseeing the competitive framework.

How does this impact household electricity bills?
Initially, there may be minimal change, but over time, increased competition may lead to better rates and service quality.