ISLAMABAD: The Peshawar Electric Supply Company (PESCO) and the Khyber Pakhtunkhwa (KPK) government are negotiating a contract aimed at increasing revenue and reducing load shedding, particularly in high-loss areas.
According to sources, the proposed agreement seeks to improve power supply to feeders experiencing over 20% losses by enhancing recovery rates and curbing electricity theft. PESCO currently suffers annual losses of approximately Rs 130 billion, significantly contributing to the power sector’s circular debt.
Discussions began following a February 17, 2025, meeting between KPK Chief Minister Ali Amin Gandapur and PESCO Board Chairman Himayatullah Khan, a former NEPRA (KPK) member and energy advisor. In a letter to the Chief Minister, Khan emphasized that reducing load shedding, addressing theft, and improving revenue recovery are critical for a sustainable power supply. A draft contract has been shared with the KPK government for approval.
Under the proposed contract, PESCO will commit to minimizing load shedding, while the KPK government will spearhead an anti-theft and recovery campaign. The province will also compensate PESCO for financial losses incurred by supplying additional electricity to high-loss feeders.
The initiative will launch as a pilot project in selected areas, running from March to April 2025. If successful, it could be expanded; if not, the contract will be terminated, with KPK covering PESCO’s losses. The Chief Minister will personally select feeders and appoint MNAs or MPAs to lead the campaign, with non-cooperation being considered government negligence.
Current feeder statistics for FY 2023-24 indicate:
Up to 20% losses (98 feeders) – No load shedding
20-40% losses (211 feeders) – 6-7 hours load shedding
40-60% losses (224 feeders) – 12 hours load shedding
60-80% losses (204 feeders) – 16 hours load shedding
Above 80% losses (187 feeders) – 30 hours load shedding
Financial losses due to one hour of electricity supply per feeder range from Rs 0.031 million (20-40% loss feeders) to Rs 0.185 million (above 80% loss feeders), with monthly losses exceeding Rs 5.5 billion for high-loss areas.
PESCO will ensure equitable load management based on Aggregate Technical and Commercial (AT&C) loss results, providing weekly updates to the KPK government.
KPK Government’s Obligations:
Financial Compensation: The government will cover PESCO’s losses from additional electricity supply.
Leadership Role: The Chief Minister will direct MNAs/MPAs to lead anti-theft campaigns, with non-compliance reflecting on the government.
Timely Payments: Dues will be cleared monthly to uphold contract terms.
Public Awareness: A campaign will educate citizens on energy conservation, power theft eradication, bill payments, and the direct link between reduced load shedding and adherence to the contract.
Additionally, the KPK government will deposit a security payment (amount to be determined) at the time of signing.
The proposed contract aims to strike a balance between reducing load shedding, combating power theft, and improving financial sustainability in Khyber Pakhtunkhwa.
Story by Mushtaq Ghumman
