Pakistan is preparing to finalize its first major electricity transaction under a new wheeling auction system, with plans to seal a 200-megawatt deal by June. The development marks a major step toward transforming Pakistan’s electricity sector by introducing competition and allowing direct transactions between power producers and large consumers.

Under the wheeling system, industrial and commercial consumers will be able to purchase electricity directly from independent power producers using the national transmission network, rather than relying exclusively on distribution companies operating under the traditional single-buyer model.

The government aims to auction up to 800 megawatts of electricity capacity this year as part of broader reforms designed to improve efficiency, reduce costs and modernize the power sector. Officials believe the introduction of competitive market mechanisms will help optimize generation capacity, reduce financial losses and create a more sustainable and transparent electricity system.

Pakistan’s power sector has long faced structural challenges, including circular debt, inefficiencies and rising costs. The transition toward a competitive electricity market is seen as a critical reform that could improve pricing efficiency, attract private investment and strengthen long-term energy security.

If successfully implemented, the wheeling system could reshape Pakistan’s energy landscape, offering greater choice to consumers, improving system efficiency and supporting the country’s broader economic and industrial growth objectives.