Pakistan seeks World Bank support for smart meters to enhance power grid efficiency

Pakistan's Power Minister Awais Leghari has sought financial backing from the World Bank to install smart meters at distribution-level transformers, a move aimed at improving transparency and addressing inefficiencies in electric grid load management. Leghari made the appeal during a meeting with the World Bank's Vice President for the South Asia Region, Martin Raiser, on January 26, 2025. According to a press release, Pakistan's Petroleum Minister Musadik Malik also participated in the talks.

Leghari explained that while smart meters have already been installed at domestic and grid levels, extending the technology to transformers is critical to ensure equitable load management. Current practices impose uniform power cuts across entire feeders, which he argued penalises efficient consumers. By managing demand at a granular level, smart meters could also help optimise peak load handling.

The minister proposed that the World Bank consider a public-private partnership (PPP) model for investments in Lahore Electric Supply Company (LESCO) and Multan Electric Power Company (MEPCO), both of which are scheduled for privatisation. Additionally, Leghari highlighted a 7% y/y increase in industrial power consumption during December 2024, attributed to the Bijli Sahulat Package.

The policy, he said, signals strong industrial demand and could pave the way for auctioning surplus electricity in the future. He also outlined ongoing reforms aimed at transitioning the power sector to a multi-buyer, multi-seller market. Wheeling charges for power transmission are nearing finalisation, and the Central Power Purchasing Agency has already been prohibited from entering new agreements.

Raiser commended Pakistan's reform initiatives and reiterated the World Bank's commitment to supporting such projects. He encouraged timely utilisation of allocated funds and expressed willingness to collaborate with stakeholders on the smart metering initiative. The meeting concluded with both sides agreeing to enhance technical collaboration, improve fund disbursement at distribution companies, and offer long-term electricity packages for private sector planning.

Pakistan's industrial sector has long grappled with unreliable electricity supply and rising energy costs, which hinder productivity and growth. Chronic power shortages and outdated infrastructure force frequent outages, leaving manufacturers unable to meet production targets.

Although government initiatives like the Bijli Sahulat Package aim to increase consumption by offering incentives, inefficiencies in load management exacerbate the problem. High transmission losses, theft, and delayed reforms have further strained resources. Industrial consumption remains below potential, as businesses often turn to expensive private generators. To tackle the crisis, policymakers are pushing for privatisation, improved distribution infrastructure, and enhanced competitiveness in the power sector.