IMF's Loan Approval Fuels Pakistan's Energy Crisis

Pakistan is facing a critical energy crisis exacerbated by financial mismanagement and corruption within the power sector. The International Monetary Fund (IMF) has recently approved a loan for Pakistan, urging the government to tackle inflation by increasing electricity and gas rates for the public. Simultaneously, other international organizations like the Asian Development Bank (ADB), OPEC Funding, Islamic Trade Finance, and the Saudi Development Fund are providing loans for the construction of new hydro power stations in the country.

Despite having a production capacity of 45,000 MW against a maximum usage of 20,000 MW, Pakistan is grappling with soaring electricity costs due to the excess capacity. The government is burdened with monthly fixed charges, known as capacity charges, for maintaining old thermal power plants beyond their contracts. This has led to a fabricated issue of load shedding, where the government claims power shortages to justify the operation of outdated plants.

The resulting 'Circular debt' has created a financial imbalance, with Pakistan selling less than 10,000 MW while paying for 45,000 MW generation. International experts have failed to address this critical issue, instead, funding more power plants through loans, further exacerbating the financial strain on the country. This cycle of corruption has allowed a few politicians to profit immensely from selling generators, diesel fuel, solar panels, and UPS batteries, while the general population continues to suffer.

Despite the urgent need for reform and the detrimental impact on the people of Pakistan, the IMF's decision to provide additional loans perpetuates this destructive cycle of financial mismanagement within the country's power sector.