Islamabad: The government has taken a significant step towards transforming Pakistan's power sector by moving from a single-buyer model to a competitive electricity market. Minister for Power Sardar Awais Ahmad Khan Leghari announced this development in a video message today.

According to Radio Pakistan, the Power Division has sought proposals for the country's first-ever electricity wheeling auction. This initiative is part of the Competitive Trading Bilateral Contract Market mechanism, which allows businesses and industrial consumers to purchase electricity directly from power producers on a competitive basis.

The Power Division has invited proposals from interested entities for the auction, with plans to auction 800 megawatts of electricity over the next five years. In the first phase, 400 megawatts will be available for competitive procurement.

Minister Leghari emphasized that the government currently purchases electricity under a centralized system and supplies it to consumers. With this new approach, the government is taking a step back from direct electricity procurement. Under the new system, the government will neither sell nor purchase electricity in the traditional manner.

The new mechanism will enable electricity generators and consumers to engage in direct transactions. The Minister highlighted that this electricity trading system would be characterized by transparency and competition.

Initially, the system will be implemented for industrial and large consumers, especially those consuming more than one megawatt. The competitive electricity market is expected to gradually expand, eventually developing into a broader power market offering consumers more options for purchasing electricity.

Minister Leghari expressed optimism that access to electricity at competitive rates would enhance the competitiveness of Pakistani industries in international markets and boost their export capacity.