Amir Saeed

Pakistan is set to implement its first-ever Competitive Trading Bilateral Contract Market (CTBCM) policy, marking a transformative shift toward a liberalised and market-driven power sector.

According to a spokesperson for the Ministry of Energy, the new framework will end the government’s role as a direct electricity purchaser. Instead, generators and consumers will be able to trade electricity directly through competitive contracts. Key mechanisms such as wheeling charges are being introduced to enable fair access to the transmission system and promote transparency in energy transactions.

The Ministry of Energy spokesperson noted that the transition will be gradual and carefully managed under a comprehensive strategy to maintain stability in the system. “This move reflects the government’s broader agenda of reducing fiscal burdens, encouraging efficiency, and enabling private sector participation.” The spokesperson added that Pakistan’s energy policy focused on transparency, regulatory reform, and investor confidence.

“International investors are being encouraged to explore opportunities across power generation, distribution, and renewable energy segments.” In addition to CTBCM, the government continues to advance reforms in areas such as net metering, privatisation, and institutional restructuring, creating a more open, reliable, and investment-friendly energy market.

Talking to WealthPK, Afia Malik, senior energy expert at the Pakistan Institute of Development Economics (PIDE), viewed Pakistan’s transition to the CTBCM as a crucial step toward addressing longstanding inefficiencies in the power sector. She pointed out that a major hurdle in establishing a truly competitive market had been the inefficiency in the distribution supply chain, compounded by tariff designs that rely heavily on cross-subsidies and an already surplus capacity problem.

Afia Malik said that moving towards a free market, as opposed to a regulated one, is essential for true competition and fairness in the sector. She emphasised that while the CTBCM framework promises transparency and efficiency, critical decisions need to be made to balance market freedom with appropriate regulation.

According to her, success hinges on not only the policy structure but also improvements in institutional capacity, alignment of market rules with ground realities, and infrastructure readiness. She stressed that removing distortions like cross-subsidies would help attract investment, ultimately benefiting consumers through better service and fairer pricing.

Credit: INP-WealthPk