ISLAMABAD: Pakistan’s power regulator approved the country’s first-ever competitive electricity wheeling auction process Tuesday, declaring Jan 22, 2026, as the official start of commercial market operations and marking a pivotal break from the country’s decades-old single-buyer power model.
The National Electric Power Regulatory Authority (Nepra) endorsed the auction mechanism submitted by the Independent System and Market Operator (ISMO), paving the way for competitive allocation of up to 800 megawatts of electricity demand and recovery of stranded costs tied to market liberalisation. The first auction is expected around June or July 2026.
Federal Power Minister Sardar Awais Ahmed Khan Leghari called the declaration a defining milestone, saying it marks a decisive shift from reform planning to practical implementation.
“The transition from a single-buyer model to a competitive, transparent and market-based framework reflects years of policy development, regulatory strengthening and institutional coordination,” Leghari said in a statement.
The approval came with several binding conditions. Nepra directed ISMO to publish an interim congestion disclosure note alongside each auction’s request for proposals, giving bidders guidance on transmission network constraints until a full node assessment study is completed in January 2027.
All seven members of the auction committee must submit written conflict-of-interest declarations before proceedings begin. Anti-collusion safeguards were also introduced, capping any single bidder or affiliated group at 20 percent, or 160 megawatts, of total auctioned capacity. ISMO must publish anonymised aggregate data after each auction round, including bids received and allocation outcomes. Nepra upheld core parameters set by the federal government, including the 800MW ceiling, one-year bid payment structure and the absence of predetermined bid limits, noting these fall outside the regulator’s mandate to revise.
The approval follows federal policy amendments and the issuance of Framework Guidelines for Wheeling Auctions on Jan 22, 2026. Nepra said the process aligns with principles of transparency, non-discrimination and procedural fairness as Pakistan transitions toward a competitive electricity market under the Competitive Trading Bilateral Contract Market, known as CTBCM.
The regulator warned that if ISMO fails to comply with any regulatory direction within 30 days, the auction process will be deemed amended accordingly.
Minister Awais Leghari credited coordinated efforts among the Ministry of Energy, Nepra, ISMO, the Central Power Purchasing Agency, Private Power and Infrastructure Board and power distribution companies for achieving the milestone. He said that the government would continue working toward a reliable, efficient and future-ready electricity market that supports clean energy and long-term economic growth.
