ECC approves energy sector reform frameworks

Islamabad
The Economic Coordination Committee (ECC) of the Cabinet met today under the chairmanship of Senator Muhammad Aurangzeb, Federal Minister for Finance and Revenue, at the Finance Division, Islamabad.
The ECC considered a summary submitted by the Power Division regarding the rationalization of tariffs and payment adjustments for nuclear power plants (NPPs), government-owned power plants (GPPs), OGDCL, and SNGPL. The proposal—formulated through the Prime Minister’s Task Force on Power Sector Reforms—aims to enhance financial sustainability, streamline payments, and reduce overall costs in the power sector. The Committee endorsed the agreed framework among concerned entities for the settlement of outstanding dues and waiver of certain financial claims to support fiscal balance and tariff rationalization. These measures form part of the government’s broader strategy to strengthen the financial health of the energy sector and ensure long-term cost efficiency.
The ECC also approved another summary by the Power Division for the issuance of a Government of Pakistan guarantee amounting to Rs. 659.646 billion for circular debt financing of Rs. 1.225 trillion. The guarantee will facilitate the settlement of Power Holding Limited’s (PHL) debt and overdue payments to Independent Power Producers (IPPs). The Committee further authorized the Finance Division to issue a Letter of Comfort and directed the Power Division to report back on the timeframe for PHL’s closure following debt settlement.
In another key decision, the Committee considered a summary from the Finance Division on the gradual phasing out of the Home Remittance Incentive Schemes (HRIS). The ECC endorsed a phased, data-driven approach to maintain remittance stability and avoid abrupt disruptions that could affect the economy. The Committee agreed with the State Bank of Pakistan’s assessment that any rationalization must be gradual and evidence-based. It was further decided that the phase-out process may be completed beyond FY27, subject to review of remittance performance and FY26 outcomes.
The Committee also approved a proposal from the Ministry of National Food Security and Research for the reallocation of funds within the Division. The approval allows the transfer of resources from the IPC Division through a technical supplementary grant to support ongoing agricultural research initiatives.
A summary from the Ministry of Maritime Affairs regarding terms of engagement for utilizing the Pakistan International Bulk Terminal (PIBT) at Port Qasim for handling and exporting copper-gold commodities, minerals, and other natural resources was discussed and deferred. The Ministry was directed to resubmit the proposal after consultations with stakeholders and inclusion of a clear operational framework.
The ECC also considered a summary from the Ministry of Interior for the grant of a Technical Supplementary Grant (TSG) amounting to Rs. 960.273 million to ensure timely disbursement of salaries to transferred Pak PWD staff from October 2025 to June 2026. The Committee approved the TSG to the extent of salaries for the current quarter and directed the CDA to submit a report by December regarding its long-term staffing plan for the transferred employees.
On a proposal from the Petroleum Division, the ECC approved the allocation and pricing of gas from the Mari Field to fertilizer plants to ensure adequate and affordable fertilizer supply on a structural basis.
The meeting was attended by Federal Minister for Power Sardar Awais Ahmad Khan Leghari, Federal Minister for Petroleum Ali Pervaiz Malik, Federal Minister for National Food Security and Research Rana Tanveer Hussain, Federal Minister for Commerce Jam Kamal Khan, along with federal secretaries and senior officials from relevant ministries, departments, and regulatory bodies.