Pakistan has committed to the International Monetary Fund (IMF) to reform its electricity subsidy framework by January 2027. The current blanket subsidy, which covers households consuming up to 200 units of electricity, will be replaced with a more targeted support system.
Under this new approach, subsidies will be allocated exclusively to eligible consumers identified through the Benazir Income Support Programme (BISP) database. This shift aims to prevent widespread exploitation of the existing system and enhance fiscal discipline.
Notably, the current subsidy arrangement has been subject to abuse, with some households reportedly installing multiple electricity meters to keep individual consumption below the 200-unit limit, thereby maximizing subsidy benefits.
To implement these reforms, the government is working on integrating electricity consumer data with the National Socio-Economic Registry (NSER), with technical assistance from the World Bank. Additionally, a third-party firm will be engaged to operationalize the new subsidy delivery mechanism.
Meanwhile, plans are underway to extend Punjab’s electronic irrigation billing system, known as e-abiana, to the provinces of Sindh, Khyber Pakhtunkhwa, and Balochistan in the upcoming fiscal year. These reforms will also include adjustments to water charges to better reflect operation and maintenance costs.
In a significant development, Pakistan is nearing the receipt of a second tranche of $200 million under the IMF’s Resilience and Sustainability Facility (RSF). The IMF’s executive board is scheduled to convene in Washington on May 8, 2026, to approve this disbursement.
