KARACHI: Engro Energy Limited CEO Ahsan Zafar Syed estimates that if the DISCO operations are not improved, the inefficiencies in country’s energy sector will take the circular debt to approximately Rs 4 trillion by 2025.

He was speaking at the online Corporate Pakistan Group (CPG) Dialogue, organized under the topic ‘Fixing Pakistan’s Power Sector,’ on Friday.

The speakers at the dialogue including CEO Engro Energy Ahsan Zafar Syed, Dr Fiaz Chaudhry, Professor of Practice, Director LUMS energy institute Werner-Von Siemens Chair and Aftab Mahmood Butt, Managing director, Kott Addu Power Company KAPCO, believed that more sustainable policies, planning and distribution of the energy needs to be fixed.

Ahsan Zafar while talking about the performance of energy sector said it is impacted by several challenges that includes rising circular debt, excess capacity, low demand, high cost of electricity, etc.

“These issues can be resolved by improving the efficiency of DISCOS, proper and independent power-planning, which should focus on both the supply side and the demand side parameters, and shifting industrial captive-power generation to the grid taking measures to increase industrialization,” he said.

This way we can stimulate growth in electricity-demand, while IPP debt should be restructured from 10 to 20 years, followed by ensuring competitive bidding for all future projects, he added.

While further discussing the efficiency of DISCOs, he said the circular debt which was Rs1.2 billion as of June 30, 2018 has increased to Rs. 2.2 billion as of June 10, 2020 and if DISCO operations are not improved the inefficiencies will add an additional PKR 1.5 trillion to the stock, taking the total circular debt to approximately PKR 4 trillion by 2025.

Ahsan Zafar Syed while stating the facts that has affected the Gross Domestic Product (GDP) said, “Given the deflated demand in the country, the economy will remain relatively depressed through the years and consequently, the electricity demand to GDP would also remain low thereby causing excess capacity.

While suggesting the changes in the current planning, he said, “Planning should be optimize and reliability of power supply should be adequate, reduce system peak demand and expand the transmission, distribution and generation sector by making investments, creation of independent system operator and more investment in distribution infrastructure can help in reducing excessive technical losses.”