2 days ago
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- Business Recorder
Leghari asks Discos to coordinate with industrial units, SEZs
ISLAMABAD: Minister for Power, Sardar Awais Ahmed Khan Leghari, has directed all Distribution Companies (Discos) to coordinate with industrial units and Special Economic Zones (SEZs) to implement power supply and billing through a single point.
According to the Power Division, the directive was issued in light of a decision by National Electric Power Regulatory Authority (Nepra). Following Cabinet approval, the Power Division submitted a request to Nepra on February 25 to allow electricity to be supplied to SEZs through a single point of delivery.
Under the new framework, Discos will supply electricity to these zones at one point as per the terms of newly established agreements. This move aims to reduce unnecessary interference and curb corruption within the electricity distribution system.
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The Nepra, in its letter referred to Pesco's letter of March 26, 2025, whereby the template of the O&M Agreement (the 'Agreement') was submitted for review and approval of the Authority in terms of Nepra (Supply of Electric Power) Regulations, 2015 (the 'Supply Regulations').
In consideration of Pesco's letter, Nepra clarified that there is no provision for the approval of a template Agreement under the Supply Regulations. However, to facilitate the process, the Authority initiated a consultative process and sought comments in the matter from the concerned stakeholders by publishing a notice in the newspapers.
In this regard, various stakeholders, especially the developers of SEZ(s) & Industrial Estates, submitted their comments in the matter, raising various concerns on the submitted Agreement and the same were shared with the Ministry of Energy (Power Division) through letter of June 04, 2025, for submitting rejoinder(s).
The Power Division, through its correspondence of July 03, 2025, submitted its response on behalf of all XW-DISCO(s) agreeing to some comments of the stakeholders, while there appeared to be disagreement on several other points. It was also stated in the response of the Ministry that the O&M arrangement is an alternative framework, and does not preclude the SEZs and other eligible entities from obtaining licences for Distribution and Supplier of Last Resort. Apart from this, the Authority also reviewed the submitted Agreement and observed various discrepancies in the same in terms of the Supply Regulations.
In light of the foregoing, the Authority directed all Discos to address the observations and negotiate the Agreements with the prospective O&M operator(s). Thereafter, the negotiated draft Agreement may be submitted to the Authority for approval underRegulation 5(2) of the Supply Regulations. It further emphasized that the finalized agreement must be consistent with the provisions of the aforementioned regulations, as well as all the applicable laws and documents.
Earlier, on January 28, 2025, the Power Minister stated that the government is considering offering electricity to the industrial sector at marginal cost for three years. Other potential reforms under review include changes to net metering regulations, phasing out the uniform tariff structure, and limiting power procurement through CPPA-G to only committed projects totaling 7,000 MW.
He also disclosed that eight out of the ten Discos are slated for privatization, with financial advisors expected to be appointed by the first week of February. 'If there were no uniform tariff across the country, the performance of K-Electric in terms of losses and recovery would not be as it is today,' he added.
Meanwhile, the Board of Investment (BoI) has instructed relevant stakeholders to resolve issues faced by investors in SEZs. Several meetings of the Working Group on SEZs have been held in response to a request from the Special Investment Facilitation Council (SIFC) concerning the draft development agreement.
These issues were also discussed in a meeting between SEZA Punjab and the Punjab Board of Investment and Trade (PBIT), where it was suggested that Challenge Fashion (Pvt) Ltd could negotiate the terms of its agreement directly with SEZA Punjab.
The CEO of Challenge Fashion (Pvt) Ltd confirmed the company's willingness to proceed and stated that a follow-up letter had been sent to BoI after the meeting. However, it appeared the letter did not reach its destination. It was emphasized that negotiations with SEZA Punjab should proceed first, after which BoI would intervene as needed.
The CEO added that construction on the project would begin once the access road is completed. Construction on the road began in September 2024 and concluded by February 2025. Additionally, the SEZ requires utility services at zero point to begin the allotment process.
The Chair/Director General (SEZs & Projects) at BoI asked SEZA Punjab to clarify the situation. A representative from SEZA Punjab responded that SNGPL had issued a demand notice to the company, which must be settled before any further progress can be made.
The CEO of Challenge Fashion (Pvt) Ltd stressed that it is the government's responsibility to ensure the provision of utilities up to zero point. The company remains committed to developing the internal infrastructure as planned. SEZA Punjab then requested guidance from BoI on how to proceed.
Regarding Hub SEZ, the Chair invited the Managing Director (MD) of LIEDA to provide an update. The MD reported that the zone is currently facing funding challenges related to its development.
Copyright Business Recorder, 2025
