Pakistan has assured the International Monetary Fund (IMF) that it will gradually phase out the existing electricity subsidy for consumers using up to 200 units per month and replace it with a targeted support mechanism through the Benazir Income Support Programme (BISP) starting January 2027, according to a report.
Officials said the move is part of broader power sector reforms aimed at improving subsidy efficiency and reducing misuse. The current system, which includes tariff differential and cross-subsidies, will be replaced by a budgeted framework focused on low-income households identified through the National Socio-Economic Registry (NSER). The government will work with the World Bank to integrate electricity consumer data with the NSER database and introduce verification checks before implementation.
Authorities acknowledged that the shift could be politically sensitive, noting that some households currently manipulate consumption by installing multiple meters to remain within the 200-unit threshold. The new system is intended to address such loopholes and improve targeting accuracy.
Separately, the government plans to expand the e-Abiana irrigation service charge system beyond Punjab to Sindh, Khyber-Pakhtunkhwa, and Balochistan by August 2027. The mechanism, already operational in Punjab, will be supported by digital payment systems and broader tariff adjustment frameworks aligned with cost recovery targets.
Officials also confirmed progress under the Resilience and Sustainability Facility (RSF), with Pakistan expected to secure a $200 million second tranche following IMF Executive Board approval scheduled for May 8 in Washington. The government reported implementation of climate-related financial risk guidelines issued by the State Bank of Pakistan and disclosure frameworks introduced by the Securities and Exchange Commission of Pakistan in December 2025.
In addition, Pakistan is developing a national disaster risk financing coordination framework, expected by August 2026, with IMF support, as part of ongoing efforts to strengthen fiscal and climate resilience systems.