THE proposals of the Overseas Investors Chamber of Commerce & Industry, relating to Pakistan’s march towards a liberal electricity market, do not simply reflect the OICCI’s anxiety over the way reform is being executed. They also test the government’s willingness to transition to a robust Competitive Trading Bilateral Contract Market and power-wheeling framework. They expose a disconnect between reform aims and execution, and a power sector hampered by lack of regulatory clarity, transparency, predictable pricing and credible market institutions. It is this disconnect that worries investors. Their anxiety is reflected in OICCI’s insistence for “actionable reforms”, as poorly planned and badly executed liberalisation, marked by opaqueness, weak institutional capacity and policy reversals, will further erode investors’ trust while constraining competitiveness.

At the centre of the proposals is the demand for a cost-effective and transparent wheeling framework, with charges unbundled into clearly defined transmission, distribution, system operations and system loss components. This must restore price predictability for long-term contracts. Another proposal calls for the gradual expansion of the wheeling allocation based on improvements in grid performance, settlement efficiency and regulatory readiness. Premature scaling in a struggling system risks destabilising Discos’ finances and undermining market confidence. Charges must balance investor affordability with the financial sustainability of Discos and the broader power sector. Excessive wheeling costs will blunt competitiveness, while under-recovery will result in surcharges. Equally crucial for success is grid modernisation. Yet another important proposal concerns integration of climate and trade considerations into power reforms. Facilitating green bilateral contracts under CTBCM would allow foreign and export-oriented investors to access renewable electricity and manage carbon exposure. In this context, electricity market reform is more than an energy policy issue; it becomes an export survival strategy. The proposals also stress a single-window, time-bound regulatory approval framework across government institutions, without which even well-designed market reforms risk failure. They offer the authorities the choice of either pursuing rules-based liberalisation or continuing with piecemeal reforms that impede investment.

Published in Dawn, January 3rd, 2026