Govt invites bids for first 400MW wheeling auction, says it is exiting power procurement

The government has announced the first 400 megawatt (MW) wheeling auction under the Competitive Trading Bilateral Contracts Market (CTBCM), marking a significant shift towards a competitive electricity market in Pakistan. The Independent System and Market Operator (Ismo), a subsidiary of the Power Division, has published the Request for Proposals (RFP) for the auction, inviting potential participants to submit their proposals by November 20, 2026.

The last phase of the auction will offer electricity directly to large, mostly industrial consumers, rather than relying solely on state-owned distribution companies.

The government's decision to phase out state-led power purchases and introduce a competitive electricity market comes as part of its plan to transition the power sector from a single-buyer model. This first phase of the auction will see a maximum allocation of 160MW per participant, spread across five annual auctions over the next five years.

Each participant can develop or procure a single generation plant of up to 160MW or multiple plants of varying capacities, provided their total allocated capacity does not exceed the 160MW limit over the five-year period.

The government aims to make electricity procurement transparent and competitive, with businesses and industrial consumers being able to purchase electricity directly from power producers. This new mechanism is expected to prevent the government from purchasing and subsequently selling electricity to consumers at rates determined by a centralized arrangement.

It is hoped that the competitive electricity market will help Pakistani industries remain competitive in international markets and enhance their ability to export products.