News
NEPRA Approves $58bn Power Expansion Plan for Pakistan's Next 11 Years
By Mariam Khan
Real Estate Analyst
4 min read
The National Electric Power Regulatory Authority has conditionally approved the Integrated System Plan 2025, envisaging approximately $58 billion in investment in electricity generation and transmission over the next 11 years, through 2035. NEPRA issued the approval as a 45-page decision, but this was a genuinely contested rather than clean approval, with all three members of the Authority, including the chairman, recording more than 12 pages of dissenting or separate advisory notes.
Why This Approval Was Genuinely Controversial
NEPRA's own members raised serious concerns over the grounds for including and excluding specific major projects within the plan, and questioned whether the process had improperly bypassed the Council of Common Interests, the constitutional forum specifically responsible for matters including national energy policy and planning. The regulator also placed on record contradictory statements between the Independent System and Market Operator, which prepared the plan, and the Power Planning and Monitoring Company, regarding the plan's actual impact on consumer electricity tariffs.
What the Plan Actually Covers
NEPRA approved the plan to the extent of the Revised Base or Recommended Case of the Integrated Generation Capacity Expansion Plan 2025, specifically excluding Battery Energy Storage Systems and a K-Electric transmission line originally proposed for 2028, together with a revised Transmission System Expansion Plan, subject to the regulator's observations being addressed. Under the adopted low-growth, business-as-usual reference scenario, based on average GDP growth of 3.52 percent, the plan envisages 26,045 megawatts of additional generation capacity, comprising 17,485 megawatts of already committed capacity and 8,560 megawatts of newly optimised capacity, alongside retirement of 2,577 megawatts of existing capacity. This would bring Pakistan's total installed generation capacity to 62,657 megawatts, including 8,120 megawatts of net metering capacity. Generation capacity additions alone are projected to cost approximately $47.08 billion, with transmission upgrades, including new extra-high-voltage substations and network reinforcements, accounting for the remaining roughly $10.65 billion.
Why NEPRA Rejected the Battery Storage Component
NEPRA specifically declined to approve a proposed $900 million investment in battery energy storage systems, stating this required a detailed technical and economic study establishing genuine need, optimal capacity, operational use, and cost effectiveness before it could be included, rather than approving it on the basis presented. The regulator separately found the proposed 2028 timeline for a new K-Electric transmission line interconnection unrealistic, given the line would actually require approximately five years to construct.
The Consumer Tariff Question NEPRA Explicitly Flagged
Given the conflicting positions from ISMO and PPMC on how this plan would affect consumer electricity bills, NEPRA directed that the tariff impact be properly quantified and explicitly incorporated into the main plan document going forward. According to PPMC's own projection, the consumer-end base electricity tariff could rise to Rs37.28 per unit by 2035, up from Rs34 per unit in 2024-25, a genuine, officially projected cost increase directly tied to funding this expansion programme.
What Remains Unresolved
NEPRA's approval is explicitly conditional on its observations being addressed, meaning the plan as it currently stands is not a final, unqualified authorisation. Given that the regulator's own three members could not fully agree among themselves, with individual members separately objecting to the removal of specific previously approved projects on the basis that doing so could undermine investor confidence, how these internal disagreements are ultimately resolved will shape the plan's final, implemented form.
What This Means for Housing Schemes, Commercial Projects and Industrial Estates
Expansion of generation and transmission capacity at this scale, if genuinely delivered, could meaningfully improve electricity availability for new housing schemes, commercial developments, and industrial estates in areas currently constrained by limited grid capacity, supporting new urban development that has previously been held back by power availability concerns. At the same time, the explicitly flagged possibility of consumer tariffs rising to Rs37.28 per unit by 2035 means this expansion carries a genuine, officially acknowledged cost that will eventually be reflected in electricity bills for residential and commercial property occupants alike, a factor developers and property investors should weigh alongside the improved availability this investment is intended to deliver.
What This Means for Construction and Infrastructure Demand
A genuinely $58 billion, decade-plus investment programme spanning new power plants, substations, and transmission infrastructure represents a substantial pipeline of construction and infrastructure activity in its own right, with direct relevance for contractors, engineering firms, and construction material suppliers connected to power sector projects. Given the plan's conditional status and the unresolved internal disagreement among NEPRA's own members, businesses connected to this pipeline should watch for confirmation of how specific project inclusions and exclusions are finally settled before treating any individual project within this broader plan as confirmed.