Restoring Confidence: Why Regulatory Clarity Matters for Power Sector Sustainability

Ensuring the sustainability of Pakistan’s power sector requires more than just policy reforms—it demands regulatory clarity, consistent decision-making, and a willingness to separate facts from perception. Investor confidence hinges on these fundamentals. K-Electric’s recent write-off claim brings this challenge into sharp focus. At stake is not just the financial stability of a single utility, but the credibility of the regulatory environment that underpins the entire sector. The claim relates to long-standing receivables deemed unrecoverable—accounts with disconnected connections, removed meters, and in many cases, legal proceedings already underway. These aren’t discretionary losses; they’re the documented costs of serving a complex, often volatile urban landscape like Karachi, home to nearly 900 informal settlements. As a private utility, K-Electric operates without the fiscal fallback of state-run counterparts, which can defer such losses into the government’s circular debt pool. For KE, unrecovered dues impact the bottom line directly. These costs have been audited, approved by the company’s board, and submitted in line with existing regulatory frameworks. In a stable investment climate, such provisions would be considered part of routine operations. Yet the surrounding discourse often shifts from regulatory validity to perceived consequences—how the public might respond, what political optics might emerge. While such concerns are natural, they risk overshadowing the fundamental question: Are these claims legitimate under current rules? When regulatory decisions appear reactive or inconsistent, they send worrying signals to investors and stakeholders. They introduce uncertainty where predictability is needed most—especially in a sector that urgently requires long-term capital and innovation. Supporting a principle-based approach doesn’t mean ignoring the bigger picture—it means strengthening it. Sustainable growth, reliable service, and greater investor interest all begin with fair, fact-based decisions. The way forward lies in reinforcing the foundations: regulatory discipline, transparency, and a shared commitment to reform. Only then can the power sector move beyond crisis response and toward lasting resilience. This article is written by Rayyan Jamil. The writer is an energy sector analyst with keen interest in the power sector especially renewable energy, policy development and challenges.