ISLAMABAD: Pakistan’s power distribution companies bled a combined Rs397 billion in FY2024-25 due to unchecked transmission and distribution (T&D) losses and weak bill recoveries, intensifying circular debt and exposing deep governance failures, according to the latest Performance Evaluation Report issued by the National Electric Power Regulatory Authority (Nepra).
The report shows Rs265 billion was lost to excessive T&D losses alone after every Disco failed to meet regulatory benchmarks, while poor recoveries added another Rs132 billion hit to the national exchequer. The regulator described the sector’s performance marred by systemic inefficiencies, weak oversight and operational complacency.
T&D losses remained the sector’s biggest financial drain. Pesco topped the list with Rs87.48 billion in losses, followed by Qesco at Rs52.41 billion, Sepco at Rs36.04 billion, Lesco at Rs35.17 billion and Hesco at Rs27.14 billion. Despite repeated directives and funding approvals for system upgrades and loss reduction, none of the utilities achieved their assigned targets, underscoring chronic execution failures.
K-Electric reported T&D losses of 14.73pc against a 14.27pc target for FY25 under the notified tariff determination. Although the regulator later revised its benchmarks to 0.75pc transmission and 8.80pc distribution losses under a decision dated October 20, 2025 tied to its seven-year investment plan (FY2024-2030), that ruling remains unnotified and under adjudication in the Sindh High Court. The regulatory uncertainty adds another layer of complexity to Karachi’s already strained power landscape.
Revenue recovery presented a divided picture. Iesco, Gepco, Fesco, Lesco and Mepco posted a 100pc recovery rate, while Pesco 91.5pc and K-Electric maintained above 90pc. However, K-Electric still reported Rs74.66 billion in unrecovered dues at a 90.56pc recovery ratio. Hesco and Sepco lagged with recovery rates of 74.80pc and 74.20pc, respectively. Qesco recorded the lowest recovery at 38.7pc, though slightly improved from 31.79pc last year. Collectively, weak recoveries contributed to an estimated Rs132 billion loss by XW-DISCOs, compounding circular debt pressures.
Operational failures extended beyond finances. As of June 2025, 128,096 consumers who had paid for new connections were still awaiting electricity, with Mepco and K-Electric missing the 95pc timely connection benchmark by failing to connect 13-14pc of applicants within the stipulated period.
Safety performance further darkened the sector’s record. Iesco reported 28 fatalities, the highest among Discos, followed by K-Electric with 24, Pesco with 20 and Hesco with 13. Qesco reported the fewest at 2, with others like Lesco (5), Mepco (6), Fesco (6) and Gepco (6).
Nepra warned that without structural reform and stricter oversight, Pakistan’s power sector risks deeper financial decline and public harm, urging disco restructuring, privatisation, policy overhaul and rapid technology upgrades.
