Pakistan’s power distribution system is incurring annual losses exceeding Rs. 1 trillion due to transmission inefficiencies and poor bill recovery, according to the latest performance evaluation report for FY25 released by the National Electric Power Regulatory Authority (Nepra).
The regulator highlighted deep-rooted structural weaknesses, stating that persistent transmission and distribution (T&D) losses along with low recovery rates continue to undermine the financial sustainability of the power sector.
According to the report, ex-Wapda distribution companies recorded T&D losses of 17.55 percent, coupled with unrecovered billing of around 3.5 percent during FY25. These inefficiencies resulted in losses of approximately Rs. 910 billion, which exceed Rs. 1 trillion when combined with losses incurred by K-Electric.
Nepra noted that no distribution company met its technical loss targets during the year, causing an additional financial impact of Rs. 265 billion on the sector.
Companies with Highest Losses
Among distribution companies, the highest losses were recorded by:
- Peshawar Electric Supply Company (Pesco) – Rs. 87.48 billion
- Quetta Electric Supply Company (Qesco) – Rs. 52.41 billion
- Sukkur Electric Power Company (Sepco) – Rs. 36.04 billion
- Lahore Electric Supply Company (Lesco) – Rs. 35.17 billion
Operational and Safety Concerns
The report also flagged serious operational challenges, including frequent load shedding, delays in new electricity connections, and weaknesses in billing systems. These issues continue to affect supply reliability for households and businesses.
Safety performance remained a major concern, with 118 fatalities reported during FY25, including 38 employees and 80 members of the public.
Islamabad Electric Supply Company (Iesco) reported the highest number of safety incidents, followed by Pesco, K-Electric, and Hyderabad Electric Supply Company (Hesco).
Nepra observed that the policy of revenue-based load shedding has failed to deliver the desired results and has instead contributed to the accumulation of circular debt.
Despite limited improvements in certain areas, the regulator warned that unresolved inefficiencies, weak governance, and poor enforcement remain major obstacles to reforming Pakistan’s struggling power sector.
