This is a follow-up piece. The first part appeared on 1st August 2024. Both may be read together. Let us explore potential solutions and actions that can be taken by the State of Pakistan to mitigate the losses or, more fundamentally, address the challenge of significant capacity payments. We may even convert this challenge into an opportunity, for both the challenges and opportunities come together.

Privatise Discos: Several successive governments have discussed privatizing the distribution companies. The sooner we do it, the better. We are already late. Select feeders can be privatized as the first step, with buyers incentivized to reduce losses. This would create a mutually beneficial transaction.

There has also been a discussion about handing over these companies to the relevant provincial governments. However, I do not believe this would solve the problem; it might instead exacerbate it.

Improve recoveries with the help of provincial governments: It is an open secret that there is chronic electricity theft in the country. Additionally, certain consumers including some public sector entities do not pay their bills regularly.

Without the support of provincial governments, these issues may not be resolved. These governments could be offered a share in the recovery or even some free equity in the distribution companies to make them stakeholders in the viability of these entities.

Extend loan tenors: All lenders, both local and international, should be approached with a........

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