ISLAMABAD: The Power Division on Thursday expressed displeasure over a damning report of the National Electric Power Regulatory Authority (Nepra) about poor performance of the power distribution companies in 2024-25, saying the report ignored improved ground realities.
It said the Nepra report that “painted a concerning picture of the power sector” and the data presented in report did not accurately reflect the ground realities of the past fiscal year. The narrative of stagnation ignores a historic turnaround in operational and financial indicators achieved during FY25.
Interestingly, the Power Division and its entities provided data to Nepra that formed the basis of its report. The Power Division said that ‘landmark reduction in circular debt’ and the tangible improvements delivered by Discos were ignored by the regulator. Notably, in FY25, the circular debt has been reduced by Rs780 billion, from Rs2,393bn in FY24 to Rs1,614bn in FY25.
This unprecedented achievement was made possible through multiple coordinated efforts, including improved Discos performance (Rs193bn), successful late payment interest waiver negotiations with power producers (Rs260bn), and improvements in macroeconomic indicators (over Rs300bn). The Rs193bn contribution from improved Discos performance is a direct outcome of the operational and financial discipline enforced on the ground. Contrary to the impression of inefficiency, Discos achieved a remarkable increase in recovery performance. The recovery rate surged from 92.4pc in FY24 to 96.6pc in FY25, a 4.2 percentage point jump.
Points to Rs780bn debt cut, stronger performance in FY25
This improvement is the direct result of aggressive enforcement against defaulters and enhanced billing accuracy, and it is the primary driver behind the Rs193bn contribution to circular debt reduction. The most critical metric for sector health — the amount of revenue left uncollected — has seen a staggering turnaround.
The financial burden of under-recovery was slashed by Rs183bn, plummeting from Rs315bn in FY24 to just Rs132bn in FY25. This 42pc reduction in financial bleeding is a major factor in slowing — and now reversing — the accumulation of circular debt. Transmission and Distribution (T&D) losses decreased from 18.3pc to 17.6pc in just one year.
Published in Dawn, February 27th, 2026