During a Cabinet Committee on Energy meeting chaired by Prime Minister Shehbaz Sharif in Islamabad today, the establishment of an Independent System and Market Operator (ISMO) for the generation and purchase of electricity was approved in principle.
The approval will also need to be confirmed by the federal cabinet.
The ISMO will be registered with the Securities and Exchange Commission of Pakistan (SECP) under the Companies Act of 2017.
This initiative aims to gradually reduce the government’s role as the sole buyer of electricity, transforming the market into a competitive, multi-player environment. It will allow electricity consumers to purchase power from suppliers other than the distribution companies.
The new system is expected to facilitate long-term planning for cost-effective power generation and transmission systems.
With the establishment of ISMO, significant reductions in circular debt and electricity rates in the power sector are anticipated.
