Energy sector plans get IMF’s thumbs down

The International Monetary Fund (IMF) on Monday turned down Pakistan’s proposals to settle Rs1.3 trillion of energy sector circular debt and reduce electricity prices for industries, saying these proposals would overburden the residential consumers and also carry fiscal risks.

“The proposed (industrial tariff reduction) plan does not address the underlying problems and in particular, the circular debt neutrality of the tariff rationalization plan is doubtful,” IMF’s Mission Chief to Pakistan Nathan Porter said in a statement issued on Monday.

The IMF’s public disapproval of both the plans dampens the hopes of the interim government that was expecting to at least settle over one-fifth of the energy sector circular debt before leaving office.

The mission chief further added that the industrial tariff reduction plan “would place a significant additional burden on vulnerable households”.

Read more: https://tribune.com.pk/story/2456302/energy-sector-plans-get-imfs-thumbs-down