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Pakistan is considering a $2.3 billion project to install 16.2 million smart electricity meters across five distribution companies, but FPCCI warns the financing structure could leave consumers paying around Rs1.4 trillion over 12 years without guaranteed improvements in electricity theft or bill recovery.
Pakistan’s Private Power and Infrastructure Board (PPIB) has begun consultations on a proposed $2.3 billion smart metering project that would install approximately 16.2 million advanced electricity meters across five distribution companies. The initiative aims to modernise electricity distribution, but the proposed financing structure has raised concerns about its long-term impact on consumers.
According to Business Recorder, the project would replace existing single-phase meters operated by Lahore Electric Supply Company (LESCO), Multan Electric Power Company (MEPCO), Peshawar Electric Supply Company (PESCO), Quetta Electric Supply Company (QESCO) and Hazara Electric Supply Company (HAZECO).
The proposed public-private partnership would allow private service providers to finance, install and manage the meters, with installation costs recovered through electricity bills over a period of up to 12 years.
The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has opposed the proposed arrangement, warning that consumers could collectively pay approximately Rs1.4 trillion over the financing period. The federation argues that fixed payments could impose additional costs without guaranteeing reductions in electricity theft, distribution losses or improvements in bill recovery.
FPCCI’s illustrative calculations estimate that installing 16.2 million meters at Rs40,000 each would cost around Rs648 billion. Financing this amount over 12 years at an assumed interest rate of 15% could result in annual payments of approximately Rs119.5 billion, equivalent to around Rs615 per meter each month. These figures exclude operating and technology-related expenses.
A report by Energy Update also highlighted calls for an independent financial assessment before the project proceeds.
FPCCI has warned that the payment mechanism could resemble the capacity-payment model associated with independent power producers, leaving consumers liable for costs regardless of actual performance. It has called for transparent disclosure of project costs, independent cost-benefit analysis and payments linked to verified improvements in electricity distribution and revenue recovery.
The federation has also raised concerns about foreign exchange adjustments, government guarantees, tariff implications and cybersecurity. Distribution company representatives questioned aspects of the consultation process, while stakeholders discussed the effectiveness of smart meters in areas affected by widespread electricity theft and non-payment.
Officials have indicated a preference for locally manufactured meters, with international companies potentially partnering with domestic investors. A pilot project is expected to begin in November 2026, followed by further consultations in Karachi, Lahore and Islamabad.
The government has yet to finalise procurement and technology arrangements. FPCCI wants the framework suspended until the financial implications are independently assessed and relevant regulatory proceedings by NEPRA are completed.
