Power Sector Losses Cross Rs. 1 Trillion Annually

Pakistan’s power distribution system is losing over Rs. 1 trillion annually due to transmission losses and unpaid electricity bills, highlighting deep structural issues in the sector.

The findings were revealed in Nepra’s performance evaluation report for FY25, which pointed to persistent inefficiencies and operational weaknesses.

The regulator said transmission and distribution losses, along with poor recovery performanc,e continue to undermine the sector’s financial health and service quality.

These issues are also contributing to the rising circular debt burden. According to the report, ex-Wapda distribution companies recorded transmission and distribution losses of 17.55 percent, along with unrecovered billing of around 3.5 percent.

This resulted in losses of approximately Rs. 910 billion, which exceed Rs. 1 trillion when combined with K-Electric’s contribution.

Nepra noted that no distribution company was able to meet its technical loss targets during the year. As a result, the sector suffered an additional financial impact of Rs. 265 billion.

The highest losses were recorded by Pesco at Rs. 87.48 billion, followed by Qesco at Rs. 52.41 billion, Sepco at Rs. 36.04 billion and Lesco at Rs. 35.17 billion.

The report also highlighted serious operational challenges, including frequent load shedding, delays in providing new connections and weak billing systems. These factors continue to affect electricity supply reliability for both households and businesses.

Safety concerns have also intensified, with 118 fatalities reported during FY25, including 38 employees and 80 members of the public.

Iesco reported the highest number of incidents, followed by Pesco, K-Electric and Hesco.

Nepra further observed that the policy of revenue-based load shedding has failed to deliver results and has instead contributed to the accumulation of circular debt.

Despite some improvements in certain areas, the regulator warned that unresolved inefficiencies, poor governance and weak enforcement continue to pose a major challenge to Pakistan’s power sector.