The Sustainable Development Policy Institute (SDPI) has released a research report on the privatization of electricity distribution companies in the country, stating that the privatization of K-Electric saved the national exchequer Rs 900 billion.
The report examines the improvements in the utility following K-Electric's privatization. According to the report, after privatization, there was an increase in the electricity transmission and distribution network and overall electricity sales. It emphasized that privatization of electricity distribution companies is essential to reduce the burden on the national treasury and eliminate circular debt. The government is required to privatize state-owned distribution companies under IMF conditions.
The SDPI report states, "It appears that the government is seriously working on the privatization of electricity distribution companies to rid the country of circular debt."
The report further mentions that the privatization of electricity distribution companies could reduce the financial burden on the national treasury, as these companies have not made significant progress in reducing their transmission and distribution losses. This has resulted in annual electricity theft of Rs 500 billion, further burdening the national exchequer, and the circular debt has reached Rs 2,900 billion.
According to the SDPI report, since privatization, K-Electric has invested $4 billion in the transmission and distribution system, resulting in a 52% improvement in K-Electric's losses. The World Bank has also reported that K-Electric's privatization has saved the national exchequer Rs 900 billion.
The report additionally states that since privatization, the government has not provided any operational subsidies to K-Electric. Following privatization, K-Electric has increased the number of consumers, expanded the electricity transmission and distribution network, and boosted overall electricity sales.
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