Power sector in Pakistan continues to face mounting financial pressure as inefficiencies, losses, and weak recoveries add billions of rupees to national debt.
Despite a restructuring deal that reduced part of the outstanding burden, underlying structural problems remain largely unresolved across the electricity distribution system.
During FY25, losses, inefficiencies, and under-recoveries added Rs397 billion to the sector’s burden, with a further Rs171 billion recorded in the first quarter of FY26.
The year began with reports of investigations into several major distribution companies, including LESCO, GEPCO, MEPCO, and FESCO, over alleged irregularities in smart meter procurement.
Rising tariffs have shifted pressure onto consumers, prompting many paying customers to adopt rooftop solar solutions, while theft and non-payment continue to grow.
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LESCO, the country’s second-largest DISCO serving more than six million customers, illustrates these challenges through rising transmission and distribution losses and declining performance.
Between FY23 and FY24, LESCO’s T&D losses increased from 11.29 percent to 15.92 percent, raising the fiscal impact from Rs21.8 billion to Rs47.6 billion.
NEPRA’s FY24 performance report highlighted LESCO’s failure to invest in network upgrades, contributing to theft, technical faults, and under-recoveries nearing Rs40 billion.
The utility has also faced scrutiny over defective meters and repeated overbilling scandals, further eroding consumer trust and financial stability.
