ISLAMABAD: Pakistan’s efforts to reshape its power market and cut electricity costs are being constrained by commitments under its International Monetary Fund (IMF) programme, Power Minister Sardar Awais Ahmad Khan Leghari said, limiting the government’s ability to introduce a flexible, market-based tariff system that could spur battery storage and accelerate the shift towards cleaner energy.
Speaking at the Solar, Storage and Flexibility 2026 Conference here, Leghari said the government was negotiating with the International Monetary Fund for several months to introduce a flexible, market-based electricity tariff system that would allow prices to reflect the actual cost of generation at different times of the day.
He said Pakistan’s inability to implement time-of-use tariffs was linked to the IMF programme limitations, despite the potential of such reforms to lower power costs, encourage battery investment and improve grid efficiency.
The minister cited international examples, including Australia, where utilities offer cheaper electricity during periods of surplus renewable generation. He said Pakistan could provide electricity at a marginal daytime cost of around Rs6 per unit, encouraging consumers to store excess solar power in batteries and use it during costly evening peak hours.
Leghari said the proposed tariff reforms would not create any fiscal burden for the government but could flatten demand peaks, reduce pressure on the national grid and accelerate renewable energy adoption.
The minister unveiled a roadmap to raise clean electricity’s share to 90 per cent by 2035 through battery storage, grid reforms and domestic manufacturing. Outlining the government’s broader energy vision, the minister said Pakistan was shifting from a “generation-first” approach towards grid flexibility, energy sovereignty and local industry development.
He said Pakistan’s consumer-led solar boom had added nearly 38 gigawatts of distributed rooftop solar capacity, creating both an opportunity and a challenge. While the country had abundant daytime solar generation, it lacked storage capacity to shift surplus power to evening hours. “Battery storage is not an optional add-on; it is a strategic asset for Pakistan’s energy sovereignty,” Leghari said, highlighting recent RLNG supply disruptions as a reminder of the risks of dependence on imported fuels.
The minister said clean energy sources, including hydropower, nuclear, wind and solar, already account for around 55 per cent of electricity generation, but warned that renewable targets must be matched with investment in storage, transmission and modern market systems.
He announced the formation of a National Steering Committee on Battery Energy Storage Systems, supported by technical and regulatory groups, to identify projects, develop commercial frameworks and accelerate a national battery storage policy.
Leghari said pilot battery projects had been approved within power distribution companies, while the Ministry of Industries and Production was preparing incentives for domestic battery assembly, manufacturing and related technologies.
Calling for international investment and green financing, he said Pakistan needed concessional funding to modernise its grid, reduce electricity costs and secure a sustainable energy future.
In another development, the Special Investment Facilitation Council (SIFC) has unlocked a $200 million strategic investment in the Barite-Lead-Zinc Project in Khuzdar, Balochistan, after resolving long-standing disputes that had stalled one of the country’s most promising mining ventures.
The breakthrough clears the way for full-scale development of the project, which had been on SIFC’s agenda since December 2023. It is being developed by Pakistan Petroleum Limited (PPL) in a joint venture with Bolan Mining Enterprises (BME), with PPL serving as the operator and holding a 50 per cent working interest.
The Khuzdar site, located in Balochistan’s mineral-rich belt, holds estimated reserves of 69 million tonnes and a projected mine life of 34 years. Officials project that the project could generate annual revenues between $150 million and $230 million once fully operational, while creating jobs and boosting mineral exports from one of Pakistan’s least developed provinces.
SIFC’s intervention resolved lease-related issues through bureaucratic delays and regulatory bottlenecks. Established to coordinate civilian and military efforts to attract foreign and domestic capital, the council has increasingly focused on mining and mineral exports as a pillar of Pakistan’s economic recovery strategy.
Officials said the Khuzdar project reflects a broader commitment to building an investor-friendly climate, particularly in Balochistan, where security concerns and administrative hurdles have historically discouraged large-scale development. With work now moving forward, the project is expected to become a flagship example of how targeted facilitation can convert dormant mineral wealth into active economic output, reinforcing Pakistan’s bid to position its mining sector as a magnet for foreign investment.
