The government has taken a major step towards transforming Pakistan's power sector from a single-buyer model to a competitive electricity market.

This was announced by Minister for Power Sardar Awais Ahmad Khan Leghari in a video message today.

The Power Division has sought proposals for Pakistan's first-ever electricity wheeling auction.

Under the Competitive Trading Bilateral Contract Market mechanism, businesses and industrial consumers will be able to purchase electricity directly from power producers on a competitive basis.

The Power Division has invited proposals from interested entities for the auction, under which 800 megawatts of electricity are planned to be auctioned over the next five years. In the first phase, 400 megawatts of electricity will be offered for competitive procurement.

The Minister highlighted that the government currently purchases electricity under a centralized system and supplies it to consumers. Now the government is practically moving out of electricity procurement from today.

He said that under the new system, the government would neither have the right to sell electricity nor purchase electricity from power producers in the traditional manner.

He said those who generate electricity and those who consume it will be able to buy and sell electricity directly. He added that the electricity trading mechanism would be based on transparency and competition.

The Minister said the system would initially be implemented for industrial and large consumers, particularly those consuming more than one megawatt.

He said the competitive electricity market would gradually expand and, in the coming years, develop into a broader power market where consumers would have greater choice in purchasing electricity.

The Minister expressed the hope that availability of electricity at competitive rates would enable Pakistani industries to remain competitive in international markets and enhance their capacity to export products.