Formation of independent body for power generation, purchase okayed

ISLAMABAD: A meeting of the Cabinet Committee on Energy, chaired by Prime Minister Shehbaz Sharif here on Wednesday, approved in principle the formation of an Independent System and Market Operator (ISMO) for generation and purchase of electricity.

The federal cabinet would give final approval to the establishment of ISMO and it would be registered with the Securities & Exchange Commission of Pakistan (SECP) under the Companies Act 2017, the PM media wing said in a statement.

The ISMO would gradually eliminate the role of the government as the sole buyer of electricity in the country and transform the electricity market into a multiplayer independent market. The system would enable electricity consumers to purchase electricity from suppliers other than distribution companies.

The institution would enable long-term planning for cost-effective power generation and transmission systems. With the establishment of ISMO, there would be a substantial reduction in the circular debt and electricity rates in the power sector and inclusion of experts would be ensured in the ISMO board.

In his remarks, PM Shehbaz Sharif said steps were being taken on priority basis for reforms in the power sector. He directed the authorities concerned to take prompt and effective steps to reduce theft and losses in the sector. He said departmental action should be taken against the employees of distribution companies involved in electricity theft.

The prime minister said use of modern technology should be ensured for reforms in the power sector and to prevent theft.

Minister for Planning and Development Ahsan Iqbal, Minister for Economic Affairs Ahad Khan Cheema, Minister for Energy Awais Khan Leghari, Minister for Petroleum Musadik Malik, Minister of State for Power and Finance Ali Parvaiz Malik and officials concerned attended the meeting.