IMF Unhappy With Solar Adoption in Pakistan

The International Monetary Fund (IMF) arrived in Islamabad on Monday and started talks with Pakistan. The IMF expressed concerns over Pakistan’s approach to managing reduced electricity demand due to solar adoption and surplus imported gas. The discussions included critical inquiries into Pakistan’s energy plans, particularly the shift to solar and surplus gas management. Pakistan proposed continuing imported gas supply for industries’ in-house power generation beyond January 2025, contingent on full cost recovery. The IMF wasn’t impressed, reported Express Tribune. The IMF also asked questions about Pakistan’s handling of unpaid Gas Infrastructure Development Cess (GIDC) dues exceeding Rs. 400 billion, which the government blamed on stay orders issued by local courts. It bears mentioning that the Supreme Court cleared these dues for recovery in 2020, yet the government has struggled to collect from key sectors like fertilizer and textiles. On solar energy, the IMF sought clarification on the impact of provincial incentives that contradict federal policies and demanded a comprehensive response from the government. The IMF also reviewed Prime Minister Shehbaz Sharif’s winter package which discounts incremental power usage for residential and commercial consumers. The IMF found progress on circular debt management and 91 percent bill recovery satisfactory but insisted on targeted subsidies limited to Benazir Income Support Program beneficiaries only. The government further said it was discussing deferring LNG imports from Qatar to mitigate low demand. The IMF expressed concern over Pakistan’s ability to manage this surplus effectively.