The World Bank has expressed serious concerns over proposed amendments to the NEPRA Act, 1997, and the Electricity Act, 1910, warning that changes could undermine the independence of Pakistan’s National Electric Power Regulatory Authority (NEPRA).
According to reports, the amendments involve replacing references to the “Federal Government” with “Power Division” or “division concerned” in key sections, potentially allowing greater administrative control by the Power Division over NEPRA’s regulatory functions.
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NEPRA serves as an independent statutory body responsible for determining tariffs, rates, charges, and terms for electricity generation, transmission, and distribution companies. It recommends these to the relevant authorities for notification.
The proposed changes are described by the government as administrative in nature, aimed at removing procedural difficulties and avoiding delays, following a Federal Cabinet directive linked to past judicial rulings like the Mustafa Impex case.
The Power Division has clarified that policy decisions retain the term “Federal Government,” and the amendments do not subordinate NEPRA or grant the Power Division independent policy authority. However, the World Bank conveyed its worries in a recent meeting with Pakistani authorities, with another discussion planned soon.
Business and industrial sectors have echoed similar fears, arguing that diminished autonomy could affect fair tariff decisions and sector governance. Prime Minister Shahbaz Sharif has taken notice and directed the Power Minister to address the issue.
World Bank’s Stance on Regulatory Autonomy
The World Bank’s position aligns with broader international emphasis on independent regulators to ensure transparent, efficient power sectors free from undue executive influence.
In Pakistan’s context, where the energy sector grapples with inefficiencies, high costs, and ongoing reforms, preserving NEPRA’s quasi-judicial independence is seen as crucial for investor confidence and sustainable development.
Government Response and Implications
Officials maintain the amendments are technical and do not alter NEPRA’s core independence or legal status. NEPRA administratively reports to the Federal Cabinet, but its regulatory role remains intact. If adopted without adjustments, the changes could impact ongoing World Bank-supported programs in Pakistan’s energy sector, potentially delaying reforms or loans tied to governance standards.
The matter highlights tensions between streamlining bureaucracy and safeguarding regulatory integrity amid Pakistan’s persistent power challenges.