Pakistan’s electricity distribution companies, commonly known as Discos, caused a major financial loss during the fiscal year 2024-25. According to a new report by the National Electric Power Regulatory Authority (Nepra), the total loss reached Rs472 billion.
The report highlights serious concerns about the performance of power distribution companies. Officials say the losses are mainly linked to transmission issues and weak recovery of electricity bills.
Nepra stated that Discos recorded Rs265 billion in losses due to transmission and distribution problems. These losses occur when electricity is wasted or lost during the supply process.
Experts say outdated infrastructure and technical issues often increase such losses. Power theft and system inefficiencies can also contribute to the problem.
In addition to technical losses, the report pointed to poor bill collection. Discos failed to recover around Rs207 billion from consumers due to weak recovery efforts.
Officials explained that unpaid electricity bills create a significant burden on the power sector. When bills are not collected, the financial pressure eventually affects the national economy.
Nepra also noted that the Discos did not meet their performance targets for reducing losses. The regulator had set specific goals for improving efficiency in the electricity distribution system.
However, the companies were unable to achieve the expected improvements. As a result, financial losses continued to grow during the fiscal year.
The report warned that such losses contribute to the increasing circular debt in the energy sector. Circular debt occurs when power companies cannot fully recover costs across the supply chain.
When Discos fail to collect payments or reduce losses, the financial gap spreads across the entire system. This situation affects electricity producers, distributors, and government finances.
Experts say addressing these issues requires major reforms in the power sector. Improvements in infrastructure and better monitoring could help reduce electricity losses.
Authorities have also emphasized the need for stronger bill recovery systems. Efficient collection processes may help limit the financial damage caused by unpaid bills.
Nepra urged electricity distribution companies to improve their operational performance. The regulator stressed the importance of meeting targets for loss reduction and bill recovery.
Officials believe that reducing losses will help stabilize Pakistan’s energy sector. Strengthening the performance of Discos could also help control the growing circular debt problem.
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The report serves as a reminder of the ongoing challenges in the country’s electricity distribution system. Authorities say reforms and better management will be essential to improve the situation in the coming years.
