- Excessive T&D losses account for Rs265 billion.
- Weak recoveries add another Rs132 billion hit.
- No utility meets regulatory loss-reduction targets.
ISLAMABAD: Pakistan’s power distribution companies posted combined losses of Rs397 billion in FY2024-25, driven by high transmission and distribution (T&D) losses and weak bill recoveries, worsening circular debt and highlighting governance gaps, The News reported, citing Nepra’s latest Performance Evaluation Report.
The regulator said Rs265 billion was lost to excessive T&D losses as every Disco missed its benchmark, while poor recoveries added another Rs132 billion burden on the national exchequer, pointing to systemic inefficiencies, weak oversight and operational complacency.
T&D losses remained the biggest drain. Pesco recorded the highest loss at Rs87.48 billion, followed by Qesco (Rs52.41 billion), Sepco (Rs36.04 billion), Lesco (Rs35.17 billion) and Hesco (Rs27.14 billion). Despite repeated directives and approved funding for upgrades and loss reduction, none of the utilities met assigned targets, Nepra said.
K-Electric reported T&D losses of 14.73% against a 14.27% target for FY25 under the notified tariff determination. Although the regulator later revised its benchmarks to 0.75% transmission and 8.80% distribution losses under a decision dated October 20, 2025, tied to its seven-year investment plan (FY2024-2030), that ruling remains unnotified and under adjudication in the Sindh High Court. The regulatory uncertainty adds another layer of complexity to Karachi’s already strained power landscape.
Revenue recovery presented a divided picture. Iesco, Gepco, Fesco, Lesco and Mepco posted a 100% recovery rate, while Pesco 91.5% and K-Electric maintained above 90%. However, K-Electric still reported Rs74.66 billion in unrecovered dues at a 90.56% recovery ratio.
Hesco and Sepco lagged with recovery rates of 74.80% and 74.20%, respectively. Qesco recorded the lowest recovery at 38.7%, though slightly improved from 31.79% last year. Collectively, weak recoveries contributed to an estimated Rs132 billion loss by XW-DISCOs, compounding circular debt pressures.
Operational failures extended beyond finances. As of June 2025, 128,096 consumers who had paid for new connections were still awaiting electricity, with Mepco and K-Electric missing the 95% timely connection benchmark by failing to connect 13-14% of applicants within the stipulated period.
Safety performance further darkened the sector’s record. Iesco reported 28 fatalities, the highest among Discos, followed by K-Electric with 24, Pesco with 20 and Hesco with 13. Qesco reported the fewest at 2, with others like Lesco (5), Mepco (6), Fesco (6) and Gepco (6).
Nepra warned that without structural reform and stricter oversight, Pakistan’s power sector risks deeper financial decline and public harm, urging disco restructuring, privatisation, policy overhaul and rapid technology upgrades.
