IMF rejects Pakistan’s electricity relief plan: sources

The International Monetary Fund (IMF) has declined the interim government’s proposed electricity relief plan, citing discrepancies in the allocated funds for its implementation, as disclosed by sources within the finance ministry to Aaj News.

The lending institution, which entered into a bailout agreement with Pakistan in July of this year, has requested a revised plan that would avoid further burdening the population already grappling with soaring electricity bills.

Interim Information Minister Murtaza Solangi had announced on August 29 that the caretaker government was actively in talks with the IMF to introduce relief measures for electricity consumers, hinting at an impending announcement.

However, interim Prime Minister Anwaarul Haq Kakar, during a press conference on August 31, conveyed that citizens would need to settle their utility bills as there were limited alternatives, with ongoing negotiations with international lenders on the matter.

Insider sources have revealed to Aaj News that the government’s estimate indicated that the proposed relief for consumers’ bills would have a revenue impact of less than Rs6.5 billion. In contrast, the IMF’s assessment projected a revenue impact exceeding Rs15 billion.

These sources added that the IMF has requested Pakistan to furnish a plan addressing the financial gap that the country would once again face. In response, the interim government has assured the IMF of adhering to the budget while delivering relief to the populace. Additionally, the proposal to allow bill payments in installments will be revisited during further discussions with the lender.

It is worth noting that Pakistan had shared the relief plan with the IMF on a Friday, and the IMF’s response arrived after a four-day interval.