Pakistan faces mounting financial pressure as households abandon the costly national electricity grid for rooftop solar installations. The government purchases power from plants and resells it to consumers at a loss, using revenues to repay creditors such as China, but collections have dropped sharply as families generate their power through solar panels.
Lawmakers introduced import tariffs on solar equipment after an initial 18 percent tax proposal was reduced by half following public opposition. Pakistan imported $1.5 billion in panels this year, becoming the world's third-largest importer, and analysts estimate the nation has installed 25 gigawatts of solar capacity without government backing, adding significantly to its 50-gigawatt grid.
The government restructured $4.2 billion in power sector debt this month through loans from 18 banks. Privatisation Minister Muhammad Ali warned that without policy revisions, grid defection will persist and strain the already overburdened energy system.
The China-Pakistan Economic Corridor has failed to meet targets, leaving Pakistan with $9.5 billion in debt. The nation owes over $7.5 billion for power plants and nearly $2 billion to Chinese energy producers in unpaid bills.
Lawmakers introduced import tariffs on solar equipment after an initial 18 percent tax proposal was reduced by half following public opposition. Pakistan imported $1.5 billion in panels this year, becoming the world's third-largest importer, and analysts estimate the nation has installed 25 gigawatts of solar capacity without government backing, adding significantly to its 50-gigawatt grid.
The government restructured $4.2 billion in power sector debt this month through loans from 18 banks. Privatisation Minister Muhammad Ali warned that without policy revisions, grid defection will persist and strain the already overburdened energy system.
The China-Pakistan Economic Corridor has failed to meet targets, leaving Pakistan with $9.5 billion in debt. The nation owes over $7.5 billion for power plants and nearly $2 billion to Chinese energy producers in unpaid bills.
