The Economic Coordination Committee (ECC) of the federal cabinet has approved a major Rs 194 billion financial package for Pakistan’s power distribution companies (DISCOs). This timely decision, taken on June 24, 2026, aims to strengthen the financial health of DISCOs and prevent a possible meltdown in the power sector.
The package includes three main parts: a Rs 52 billion equity injection through the Central Power Purchasing Agency-Guarantee (CPPA-G), reallocation of Rs 97.649 billion from K-Electric’s tariff differential subsidy to the Inter-DISCO Tariff Differential Subsidy, and adjustment of Rs 44.198 billion in Tariff Differential Subsidy (TDS) arrears for TESCO. These steps will help improve subsidy management and ease the burden on cash-strapped utilities.
Power distribution companies in Pakistan have been facing serious challenges for years. High losses due to electricity theft, low recovery rates, and expensive power generation have put them under heavy financial pressure. This support package is expected to stabilise operations, ensure timely payments, and maintain a reliable electricity supply across the country.
Experts see this as a short-term relief measure while the government continues long-term power sector reforms. It comes at a critical time when the sector needs immediate support to avoid further circular debt buildup
As Pakistan moves forward, sustained reforms in governance, theft control, and renewable energy integration will be key to reducing such dependency in the future.