Business Recorder: ECC Directs Rs 50 Billion Transfer to Power Division
The transfer of funds and approval of the solarisation project demonstrate the government's efforts to address the power sector's challenges and meet the IMF's targets, which will have a positive impact on the country's economy and development. The project's progress and outcomes will be closely monitored, and the government's commitment to the project is a significant step towards achieving its goals.
The Economic Coordination Committee (ECC) of the Cabinet has directed the Ministry of Planning, Development, and Special Initiatives to surrender Rs 50 billion from the Public Sector Development Program (PSDP) to the Power Division, aiming to meet the subsidy requirements for the power sector and address circular debt targets set with the International Monetary Fund (IMF).
The Power Division needs Rs 1.229 trillion for subsidies to achieve the revised circular debt flow target of Rs 337 billion by June 2025. The ECC's decision is part of the allocated amount for power sector subsidies, which will help the Power Division utilize the full budgeted subsidies to meet the target. The committee also approved a Technical Supplementary Grant (TSG) of Rs 24.5 billion for the solarisation project in Balochistan, which aims to solarise 27,000 agricultural tube wells.
The solarisation project, estimated to cost Rs 55 billion, has the federal government covering 70% of the cost and the provincial government covering 30%. The project's progress is expected to be updated by July 2025, and a third-party validation report is due in May 2025. The government has reaffirmed its commitment to the project, which was approved by the Prime Minister in February 2024.
The ECC's decisions aim to address the power sector's challenges and meet the circular debt targets, which are crucial for the country's economic stability. The committee's directives will help the Power Division achieve its goals and ensure a stable power supply, which is essential for the country's economic growth and development.