IMF Raises Alarm Over Pakistan's Solar and Gas Strategy

The IMF is scrutinizing Pakistan's response to solarisation's impact on electricity demand and surplus imported gas amid economic challenges. The IMF team, led by Nathan Porter, engaged with Pakistani officials to discuss energy concerns, facing dissatisfaction with current solar incentives and proposed gas pricing strategies.

The International Monetary Fund (IMF) has raised alarms over Pakistan's strategies to address declining electricity demand, heightened by increased solarisation, and surplus imported gas due to an economic slowdown, as per reports. Led by mission chief Nathan Porter, the IMF team has arrived in Pakistan to review the three-year USD 7 billion bailout package implementation.

During initial meetings, significant discussions unfolded concerning the country's power sector, particularly on managing solar power's rise and abundant imported gas. The Express Tribune reported that the IMF expressed unease about the federal government's solar policy and questioned its alignment with provincial incentives that encourage solarisation.

The IMF further highlighted issues like rising electricity costs, propelled by inefficient power systems and energy theft, alongside debates over disconnecting gas for industrial power plants by 2025. These discussions hold critical importance as Pakistan navigates its economic recovery on the heels of narrowly avoiding default with previous IMF assistance.

(With inputs from agencies.)