"IMF lays out terms for electricity cost aid."

"IMF lays out terms for electricity cost aid."



Islamabad: IMF Urges Caretaker Government to Enhance Power Generation for Pakistani Consumers' Relief

In a bid to alleviate the burdens faced by Pakistani consumers due to a drastic surge in power bills since July, the International Monetary Fund (IMF) has urged the interim government to enhance its power generation infrastructure. Simultaneously, the IMF has called for the withdrawal of subsidies granted to captive power plants (CPPs) receiving gas supplies.

This demand surfaced during discussions between the IMF and Pakistan's Ministries of Finance and Power. As per insiders from the Ministry of Finance, the IMF has recommended an immediate increase in gas prices for CPPs effective from July 2023.

Captive power plants (CPPs) are electricity generation facilities utilized and managed by industrial or commercial energy consumers for their own energy needs. CPPs can either operate independently or connect to the electrical grid to exchange surplus electricity.

The IMF has set forth five conditions that must be met to grant relief to power consumers. Additionally, it has called upon the government to present a plan detailing the discontinuation of subsidies and the gas price hike for captive power plants.

Government officials from the Ministry of Finance have requested time to implement the IMF's stipulations.

Pakistan eagerly awaits IMF's approval before announcing relief measures for power consumers. The government had recently approached the IMF seeking concessions for electricity consumers who received inflated bills in July, sparking widespread protests across the nation, during which people set fire to their electricity bills.

This appeal to the IMF comes after Pakistan entered into a $3 billion bailout program in July, following an agreement to implement stringent economic reforms. These reforms aimed to assist consumers using up to 400 units of electricity. However, the requisite permission from the IMF is still pending.

A finance division official remarked, "Pakistan has presented various options to the IMF regarding relief for power consumers, but we are still awaiting their response."

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