Federal Minister for Power Sardar Awais Ahmed Khan Leghari has briefed a visiting European Union delegation on the comprehensive transformation under way in Pakistan’s power sector, highlighting four strategic areas for modernisation and inviting European investors to participate in the country’s ongoing privatisation and infrastructure initiatives, according to a statement issued on Monday.

The minister underscored that the Power Division has prioritised the digitisation of the national grid, with a specific focus on the large-scale deployment of smart meters, the expansion and upgrading of transmission lines, the integration of utility-scale battery storage systems, and the local manufacturing of power sector equipment. He further informed the delegation that the government is moving forward with the privatisation of electricity distribution companies (Discos), offering opportunities for European firms to take part in the bidding process.

Leghari also detailed additional structural reforms, including the divestment of old, inefficient residual fuel oil (RFO)-based power plants. He noted that by excluding approximately 7,000 megawatts of expensive, committed power plants from the Indicative Generation Capacity Expansion Plan (IGCEP), Pakistan has achieved savings of $17 billion.

The EU delegation, which included Thouraya Trimou, Director of the European Investment Bank, and EU Ambassador to Pakistan Raimundas Karoblis, expressed strong appreciation for the reforms initiated by the Power Division. The delegates stated that these measures have significantly improved the investment climate, and a number of European investors are now encouraged to consider financing and participating in various projects within Pakistan’s power sector.

As of February 2026, circular debt stood at Rs1,837 billion, reflecting a temporary increase from June 2025 primarily due to timing differences. This position improved in March 2026, with circular debt declining to Rs1,798 billion. It is projected to reach zero net addition by year-end, in line with the circular debt management plan. Discos inefficiencies have also improved notably, with a reduction of Rs48 billion during July-February 2026 compared with the same period in 2025. The circular debt settlement plan primarily involves refinancing existing high-cost liabilities with lower-cost financing, helping to ease the financial burden through reduced interest expenses.