🔲 Public Inquiry Series | Episode 11 Subject:How Can Pakistan’s Electricity System Be Fixed [Understanding and Reducing the Structural Burden of High Electricity Costs]🔺 When institutions fail to provide clarity, the responsibility to uncover the truth rests with the public.Research and Writing: Syed Shayan🟨 In Pakistan, certain IPPs established power plants with as little as 5 percent equity, relying predominantly on debt financing. The repayment of that debt, along with guaranteed returns, has been embedded in electricity tariffs and recovered from the public over a period of 25 years. Even after the full recovery of capital and profit, ownership of these assets continues to remain with private entities. This raises a fundamental question of fairness. If both capital and profit have effectively been paid by the public, on what grounds does the BOO model continue to justify private ownership, and should such assets not, in principle, revert to public ownership?
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Despite an estimated investment of nearly PKR 10 trillion in Pakistan’s wind power sector, the combined output of all 36 wind power plants averages only around 450 megawatts. In contrast, the Port Qasim power plant, developed at a lower cost, produces approximately 1050 megawatts on its own, nearly two to two and a half times more electricity.
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While significant capital has been committed to generation capacity, the transmission and distribution network has not been upgraded accordingly. As a result, a substantial portion of generated electricity cannot be evacuated or utilised and is effectively lost, even as billions of rupees continue to be paid to these power producers.This episode presents a detailed examination of wind energy in Pakistan and a structured analysis of the 36 IPPs operating within this segment.Wind is the movement of air caused by uneven heating of the earth’s surface by the sun. Warmer air rises, creating pressure differentials that draw in cooler, denser air. This movement of air constitutes wind. When harnessed through turbines, the kinetic energy of wind is converted into mechanical energy and subsequently into electricity, allowing a natural phenomenon to be utilised for power generation.Pakistan introduced its Alternative and Renewable Energy Policy in 2006, laying the groundwork for private sector participation in renewable energy. Wind power projects formally began to emerge around 2010, marking the entry of private investment into this domain.Commercial scale wind projects developed between 2010 and 2013. Among these, the project established by the Turkish company Zorlu Enerji in Jhimpir, District Thatta, is widely recognised as Pakistan’s first wind power project. Its initial testing phase began in 2009, and after reaching full operational capacity, it commenced supply to the national grid in 2013.During the same period, additional projects were developed, including those by Fauji Fertilizer Company Energy Limited and China Three Gorges. These projects were concentrated within the Jhimpir and Gharo wind corridor in Sindh, which emerged as the focal point of wind power development in Pakistan. Early IPPs established a cluster development model in this region, with the Zorlu project serving as the foundational precedent.Over time, this coastal belt in Sindh became the centre of Pakistan’s wind energy expansion, commonly referred to as the Gharo Jhimpir Wind Corridor. Located approximately 70 kilometres and 90 to 100 kilometres from Karachi respectively along the National Highway N5, these areas benefit from consistent and high velocity wind patterns, making them the most viable wind power zone in the country. Consequently, the majority of wind power projects are concentrated in this corridor.The viability of wind energy depends not merely on the presence of wind but on its quality, including the consistency of speed, stability of direction, and the resulting capacity factor. Turbines generate electricity only within a defined wind speed range, and these conditions are relatively stable within the Gharo Jhimpir corridor. Combined with proximity to Karachi’s demand centre and grid connectivity, this creates a viable model. However, even within this corridor, transmission constraints frequently limit the ability of plants to operate at full capacity, a phenomenon known as curtailment.In contrast, coastal regions of Balochistan such as Gwadar, Pasni, Jiwani, and Ormara do possess wind resources, but the consistency and supporting infrastructure remain limited. In the northern regions, including Gilgit, Skardu, and Chitral, mountainous terrain creates turbulence that undermines generation stability. As a result, wind power investment has remained largely confined to a single corridor. This raises an important question as to whether other regions of the country were ever subjected to the same level of technical assessment and policy attention.According to NEPRA data, Pakistan currently has approximately 36 registered wind power plants with a combined installed capacity of around 1848 megawatts. However, actual generation averages only about 450 megawatts delivered to the national grid, representing roughly 24 to 25 percent of installed capacity.This gap between installed capacity and realised output reflects a broader structural issue within Pakistan’s power sector. Similar patterns are observed in other segments such as bagasse and thermal generation, where theoretical capacity is not consistently translated into actual supply.🔘 To develop a clearer understanding of the wind power sector, the companies have been categorised based on ownership structure and generation capacity into five distinct groups. This classification allows for a more precise assessment of performance, partnerships, and control dynamics. 1. Pure Pakistani Companies 2. Pakistani Joint Ventures Local and Foreign 3. Chinese Backed Projects under CPEC 4. Fully Foreign Owned Companies 5. Formerly Foreign Owned Assets Now Under Pakistani Control🔘 Pure Pakistani Companies 1. Sapphire Wind Power Company Limited Ownership Sapphire Group Capacity 52.8 megawatts2. Tricon Boston Consulting Corporation Private Limited A Ownership Tricon Group Capacity 49.735 megawatts3. Tricon Boston Consulting Corporation Private Limited B Ownership Tricon Group Capacity 49.735 megawatts4. Tricon Boston Consulting Corporation Private Limited C or CC Ownership Tricon Group Capacity 49.735 megawatts Sapphire Group and Tricon Group represent four companies of the same family5. FFC Energy Limited Ownership Fauji Fertilizer Company Group Capacity 49.5 megawatts6. Foundation Wind Energy I Limited Ownership Fauji Foundation Capacity 50 megawatts7. Foundation Wind Energy II Limited Ownership Fauji Foundation Capacity 50 megawatts Three wind power companies fall under Fauji institutions8. Yunus Energy Limited Ownership Yunus Brothers Group associated with Lucky Group or Lucky Cement Capacity 50 megawatts9. Master Wind Energy Limited Ownership Master Group Capacity 52.8 megawatts10. Master Green Energy Limited Ownership Master Group Capacity 50 megawatts11. Metro Power Company Limited Ownership Metro Group Capacity 50 megawatts12. Metro Wind Power Limited Ownership Metro Group Capacity 60 megawatts13. Gul Wind Energy Limited Ownership Gul Ahmed Group Capacity 50 megawatts14. Gul Ahmed Electric Limited Ownership Gul Ahmed Group Capacity 50 megawatts15. Tapal Wind Energy Private Limited Ownership Tapal Group Capacity 30 megawatts This company is now known as Act Wind Private Limited and is listed in NEPRA records as formerly Tapal Wind Energy16. Indus Wind Energy Limited Ownership Indus Group Capacity 50 megawatts17. Artistic Wind Power Private Limited Ownership Artistic Milliners Group Capacity 50 megawatts 18. Din Energy Limited Ownership Din Group Capacity 50 megawatts19. Lucky Renewables Private Limited Ownership Lucky Group Capacity 50 megawatts 20. Lake Side Energy Private Limited Ownership Naveena Group or Alkaram Textile Capacity 50 megawatts21. Nasda Green Energy Private Limited Ownership Surti Group Capacity 50 megawatts22. Tenaga Generasi Limited Ownership Dawood Group through Dawood Lawrencepur Limited Capacity 49.5 megawatts23. Artistic Energy Private Limited Ownership Artistic Milliners Capacity 49.3 megawatts 24. Liberty Wind Power 1 Private Limited Ownership Liberty Group through Liberty Mills Limited Capacity 50 megawatts25. Liberty Wind Power 2 Private Limited Ownership Liberty Group through Liberty Mills Limited Capacity 50 megawatts26. Sachal Energy Development Private Limited Ownership Arif Habib Group with Chinese financing and EPC support Capacity 49.5 megawatts
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The total number of projects under purely Pakistani ownership is 26🔘 Pakistani Joint Ventures 27. ACT 2 Wind Private Limited Ownership Tapal Group Akhtar Group and Ismail Industries Limited Capacity 50 megawatts28. Zephyr Power Private Limited Ownership CDC Group Plc United Kingdom with Pakistani partners Capacity 50 megawatts
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Total in this category 2🔘 Chinese Backed Projects29. Hydro China Dawood Power Private Limited Ownership Hydro China Power China and Dawood Group Capacity 49.5 megawatts30. UEP Wind Power Private Limited Ownership United Energy Group China Capacity 99 megawatts31. Three Gorges First Wind Farm Pakistan Private Limited Ownership China Three Gorges Capacity 49.5 megawatts32. Three Gorges Second Wind Farm Pakistan Limited Ownership China Three Gorges Capacity 49.5 megawatts33. Three Gorges Third Wind Farm Pakistan Private Limited Ownership China Three Gorges Capacity 49.5 megawatts
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Total Chinese backed projects 5🔘 Fully Foreign Owned Companies 34. Zorlu Energy Pakistan Limited Ownership Zorlu Energy Zorlu Holding Turkey Capacity 56.4 megawatts35. Hawa Energy Private Limited Ownership Hawa Investments Limited EMA Power Investments Indus Power Limited including JCM Power Capacity 49.6 megawatts36. Jhimpir Power Private Limited Ownership JPH Holding PTE Limited Singapore with sponsors JCM Power and Burj Energy International Management Limited Dubai Capacity 49.735 megawatts
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Total fully foreign owned companies 3🔘 Formerly Foreign Owned Now Pakistani OwnedThis category includes companies whose ownership structures have evolved over time and are now under Pakistani control. Examples include ACT Wind formerly Tapal Wind Energy, Artistic Energy formerly Hartford Alternative Energy, and Lucky Renewables formerly Tricom Wind Power, though each case requires individual verification for ownership transition details.🔲 We now turn to the role of wind power in Pakistan’s economy.The total installed capacity of these wind power plants is approximately 1845.34 megawatts. However, the national grid receives only around 450 megawatts on average, representing just 24 percent of capacity.This implies that an investment of approximately 2.7 to 3.5 billion dollars, equivalent to nearly PKR 7.5 to 9.8 trillion, has resulted in a relatively modest level of actual supply. This raises a fundamental question of efficiency and planning.If the system required only this level of output, why were such large scale investments made?The question, therefore, is not merely technical but institutional. Who made these decisions, and on what basis? Which authorities approved these agreements? If the system lacked the capacity to absorb the output, then who bears responsibility for imposing a long term financial burden on the public?Such decisions are rarely the outcome of a single actor. Rather, they emerge from a broader institutional framework, often described in economic literature as extractive institutions.Daron Acemoglu and James A. Robinson explain in Why Nations FailWe call such institutions extractive economic institutions because they are designed to extract income and wealth from one segment of society to benefit anotherThey further argue that such systems are constructed by politically powerful elites and sustained through networks that concentrate power within a narrow segment of society.It is therefore essential to examine who participated in these decisions and at what levels they were taken.If the national grid was not capable of handling such volumes of electricity, why was the country committed to an expensive generation model? Why were more than one hundred power plants installed when far fewer could have met demand?If transmission constraints, distribution inefficiencies, and limited grid capacity prevented full utilisation, then why were such investments made without corresponding upgrades to infrastructure?Pakistan developed generation capacity and established wind corridors such as Jhimpir and Gharo, yet failed to modernise transmission and distribution systems at the same pace. As a result, a significant portion of generated electricity remains underutilised.Had the grid and NTDC transmission network been expanded in parallel through high voltage lines, upgraded substations, north south transmission corridors, and advanced control systems, a much larger share of generation could have been effectively utilised, reducing curtailment.International institutions including the World Bank and the Asian Development Bank have repeatedly highlighted that Pakistan’s energy crisis cannot be resolved solely through increased generation. Structural weaknesses in transmission and distribution remain a central constraint.The World Bank in its 2019 reports Learning from Power Sector Reform The Case of Pakistan and Pakistan Development Update identified poor recoveries and high transmission and distribution losses as major issues, while the Asian Development Bank consistently emphasised between 2017 and 2025 that inadequate transmission capacity prevents full integration of generated power.Despite more than a decade of such warnings, the issue remains unresolved.Data from the past four fiscal years further illustrates the problem.Installed wind capacity approximately 1845 megawattAverage generation Fiscal Year 2022 approximately 523 megawatts Fiscal Year 2023 approximately 466 to 467 megawatts Fiscal Year 2024 approximately 450 to 467 megawatts Fiscal Year 2025 approximately 434 megawattsThese figures demonstrate a gradual decline in output since 2022, largely due to transmission constraints, limited grid capacity, and curtailment. Yet during Fiscal Year 2024 to 2025, approximately PKR 168 billion was allocated to these projects based on installed capacity.This raises a critical question. How can a system justify payments based on full capacity when actual generation remains significantly lower?It is often assumed that wind power operates on a straightforward take and pay basis, where payments correspond directly to electricity supplied. However, in practice, tariff structures include fixed components such as return on equity, debt servicing, and operations and maintenance. These costs are not entirely dependent on actual generation.As a result, while capacity payments may not be explicitly labelled as such, they effectively persist under different headings. Combined with energy payments, this creates a structure that resembles take or pay in practice.Globally, complex contracts and sovereign guarantees are not unusual in large scale energy projects. The critical difference, however, lies in transparency and institutional oversight.In well governed systems, key contractual terms are disclosed, regulatory bodies, parliaments, and the media scrutinise them, and the public gains a clear understanding of future financial obligations.In contrast, when contractual terms, payment structures, and long term liabilities remain undisclosed, this constitutes non transparency. In the absence of strong oversight, this environment fosters mispricing and misaligned incentives, where each stakeholder secures its own position while the financial burden is ultimately transferred to the public.At this stage, a further question arises. Why did Pakistani IPPs rely on international financial institutions, often linked to the United States government, the IMF, and the World Bank, rather than conventional banking channels for financing these projects? What structural or policy considerations drove this choice?(Continued in the next episode)
