Pakistan has taken a notable step towards energy sector reform, with the approval of its first competitive electricity wheeling auction framework. The decision by the National Electric Power Regulatory Authority (NEPRA) marks the formal transition from a long-standing single-buyer model to a more open, market-based system.
The new mechanism enables competitive allocation of up to 800 megawatts of electricity, facilitating direct contracting between producers and large consumers while addressing legacy “stranded costs” associated with liberalisation. Importantly, the framework introduces safeguards to ensure transparency and fairness, including limits on bidder concentration, disclosure requirements, and oversight mechanisms.
The first auction, anticipated in mid-2026, is expected to serve as a pilot for broader market development under the Competitive Trading Bilateral Contract Market model.
While modest in scale, the initiative signals a pragmatic and structured approach to reform, with potential to enhance efficiency, attract investment, and support Pakistan’s longer-term energy transition.