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HomeNewsPakistan Considers Solarization Scheme for Tubewells as IMF Urges End to Subsidies

Pakistan Considers Solarization Scheme for Tubewells as IMF Urges End to Subsidies

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An IMF review mission has been engaging in discussions with Pakistan to assess the country’s economic performance during the initial three months of the current fiscal year, spanning from July to September.

During the review process, the IMF team has specifically addressed the issue of electricity subsidies and has put forth a proposal for the implementation of a solarization scheme for tubewells.

The proposed solarization scheme for tubewells is expected to cost approximately Rs. 90 billion, with sources indicating that proposals related to this scheme could be presented to the federal cabinet in the coming month. This substantial investment will be shared among the federal government, the province, and tubewell consumers on an equal basis, with each party contributing 30 billion rupees.

Furthermore, discussions are ongoing regarding the potential launch of the tubewell solarization scheme within the current financial year, indicating the urgency and importance of this initiative. The energy ministry is expected to collaborate with the finance ministry, the IMF, and the World Bank to establish the framework for this scheme.

As a key implication of this development, it has been noted that tubewell consumers will no longer receive electricity subsidies in the budget following the implementation of the solarization scheme, aligning with the IMF’s recommendations.

In addition to addressing the subsidy issue, the IMF has emphasized the need for enhanced coordination among the Distribution Companies (DISCOs), the energy ministry, and the National Electric Power Regulatory Authority (NEPRA). The implementation of decisions and measures to improve the energy sector has also been discussed.

Furthermore, sources have reported that officials from the energy and finance ministries have conducted meetings at a technical level in the context of negotiations with the IMF mission. The ongoing discussions and efforts regarding the economic and energy-related issues in Pakistan demonstrate a comprehensive approach to addressing these matters.

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