Pakistan introduces independent electricity market system

In a landmark move aimed at reforming the country’s electricity sector, Pakistan has introduced a new independent power market system that allows consumers to purchase electricity directly from suppliers. This shift marks a significant departure from the long-standing model where government entities acted as the sole power buyers.

The National Electric Power Regulatory Authority (NEPRA) has officially issued a license to the newly formed Independent System and Market Operator (ISMO), which will now assume the role previously held by the Central Power Purchasing Agency (CPPA).

The introduction of ISMO is intended to enhance efficiency, promote transparency, and gradually open up the power sector to greater private sector participation. Initially, the ISMO board will consist of three directors, with plans to expand to eleven.

Syed Zakariya Ali Shah, Additional Secretary of the Power Division, will serve as the Chief Executive Officer. He will be joined by Secretary Power Muhammad Fakhar Alam and Joint Secretary Finance Sajjad Haider as directors.

This development is part of a broader federal cabinet decision to restructure the National Transmission and Dispatch Company (NTDC) into three separate entities, with ISMO being one of them.

By creating an independent and competitive electricity market, Pakistan aims to foster better access to power, reduce inefficiencies, and attract private investments into the energy sector.