After two years of shrinking electricity demand, Pakistan’s power sector staged a strong comeback in the final quarter of FY25 — with industrial consumption surging as much as 58% in some months.
Industrial Demand Leads the Charge
The Power Division says the turnaround is largely due to “captive power” users — factories that once relied on their own generators — shifting back to the national grid. Between April and June, 280 such industrial consumers rejoined, adding an estimated 700–750MW of load.
The impact has been striking:
- April: Industrial usage up 58.8% year-on-year
- May: Up 47.4%
- June: Up 35%
Officials credit this shift to improved macroeconomic conditions, tariff adjustments, and reforms aimed at reducing inefficiencies in the sector.
Regional Winners and Losers
The revival hasn’t been uniform. Some electricity distribution companies (Discos) posted massive gains:
- Faisalabad Electric (Fesco): Industrial sales up 183%, with 200MW of captive generation absorbed.
- Lahore Electric (Lesco): Industrial sales jumped from 996 million units to 1,600 million; residential use also rose 9% following anti-theft campaigns.
- Hyderabad Electric: 75% increase in industrial sales.
- Gujranwala Electric: 35% growth.
Others saw more modest or negative results:
- Sukkur Electric: Industrial sales down 22% amid just 11 captive connections.
- Qesco (Balochistan): Drop in agricultural demand due to higher solar adoption.
Tariff Pressure Could Ease — But Not Instantly
With more industries drawing from the grid, the government hopes to spread fixed capacity charges over a larger base, easing upward pressure on tariffs. However, overall power purchases by Discos rose just 0.35% from forecast levels, even as industrial sales jumped 46%, indicating other sectors remain flat.
Pending connections — about 128,000 in total, including 500 industrial requests — could further boost demand if cleared. These represent over 1,000MW of potential load, most of it stuck in Fesco, Mepco, Gepco, and Iesco territories.
Debt Still Weighs on the Sector
Despite the demand rebound, financial strain remains heavy. Circular debt stood at Rs2.393 trillion by FY25’s end. A three-year surcharge plan is in place to help repay Rs1.275 trillion in loans taken to settle overdue payments to power producers. Lifeline consumers remain exempt, while protected users pay Rs0.43 per unit; others face Rs3.23 per unit.
