Islamabad Capital Territory

Islamabad | ReNews Pakistan

The federal government has accelerated energy sector reforms under its commitments to the International Monetary Fund (IMF), preparing to overhaul the existing electricity and gas tariff slab and cross-subsidy systems and introduce a targeted financial assistance mechanism for deserving and low-income consumers.

Under the proposed reform programme, a new electricity subsidy framework is scheduled to be introduced in January 2027, while a revised subsidy arrangement for natural gas consumers is expected to take effect from July 1, 2027.

According to official sources, the planned changes are intended to replace broad-based tariff concessions and cross subsidies with a more targeted mechanism that determines eligibility for financial assistance according to the socioeconomic circumstances of individual households.

The Power Division has initiated work, with support from the World Bank, to link electricity consumers with the National Socio Economic Registry (NSER), enabling authorities to identify households that qualify for government assistance.

Sources said the government aims to complete the verification and linking of consumer records by the end of November 2026, after which eligibility criteria for the new subsidy mechanism will be determined.

The proposed framework will utilise socioeconomic information and records associated with the Benazir Income Support Programme (BISP) to identify vulnerable households and ensure that financial assistance is directed towards consumers who face difficulties meeting their energy expenses.

The reforms form part of Pakistan's commitments under the IMF programme, which requires the government to replace the existing budgeted electricity tariff differential subsidy and cross subsidy arrangements with a targeted, budget-funded support mechanism for low income consumers.

Under the agreed reform schedule, the government is expected to establish a new subsidy disbursement mechanism through BISP by the end of January 2027.

The transition represents a significant change in Pakistan's approach to energy subsidies, which currently provides different levels of tariff relief according to consumer categories, electricity consumption and other regulatory classifications.

Under the existing cross subsidy framework, certain categories of consumers pay relatively higher tariffs to help finance concessions provided to other groups.

The proposed system seeks to shift the focus from consumption-based concessions towards financial assistance determined by household income and socioeconomic vulnerability.

According to sources, the government is pursuing these reforms partly to reduce the financial burden associated with energy subsidies and address persistent circular debt problems in the electricity and gas sectors.

Pakistan's energy sector has continued to face financial challenges arising from differences between supply costs and recoveries, outstanding payments, operational inefficiencies and the accumulation of circular debt.

The proposed changes are also intended to improve the allocation of public resources by ensuring that budgetary support reaches consumers who are genuinely in need of assistance.

However, the transition could have financial implications for households currently benefiting from subsidised tariff slabs but which may not qualify for assistance under the new eligibility criteria.

Consumers who are excluded from the targeted subsidy mechanism could face higher effective energy costs depending on the final tariff structure and the extent to which existing concessions are withdrawn.

Conversely, qualifying low income households are expected to receive financial assistance through a mechanism linked to verified socioeconomic data.

Sources said the government is also preparing to revise the natural gas subsidy framework, with the proposed changes expected to be introduced from July 1, 2027.

The existing gas pricing structure includes different consumer slabs and protected categories, while variations between regulated tariffs and the actual cost of supply have contributed to financial pressures on gas utilities.

The proposed reforms seek to address these imbalances while retaining targeted support for economically vulnerable households.

The broader energy reform programme is also being pursued alongside efforts to improve the financial performance of electricity distribution companies and advance preparations for their privatisation.

Sources said power distribution companies have submitted applications seeking adjustments to base electricity tariffs, while the government has briefed the IMF on developments concerning the restructuring and proposed privatisation of distribution companies.

The changes are expected to require coordination among the Power Division, regulatory institutions, electricity distribution companies, the BISP administration and other relevant government agencies.

The success of the proposed system will depend significantly on the accuracy of household data, transparent eligibility criteria and effective mechanisms for delivering financial assistance to deserving consumers.

A major challenge will be ensuring that economically vulnerable households are not excluded from the subsidy programme because of incomplete socioeconomic records, documentation difficulties or other administrative limitations.

The government will also need to establish a public communication strategy to inform electricity and gas consumers about the proposed changes, eligibility requirements and procedures for receiving assistance.

The final tariff structures, subsidy amounts and detailed eligibility rules for electricity and gas consumers have yet to be formally announced

Islamabad | ReNews Pakistan
Nayatel, a leading Pakistani telecommunications and information technology services provider, has signed a five year agreement with Zarai Taraqiati Bank Limited (ZTBL) to provide its cloud based business email solution, Nmail, marking another development in the adoption of locally hosted enterprise technology services by major financial institutions in Pakistan.

Under the agreement, ZTBL will migrate its business email services to Nayatel's cloud infrastructure located in Pakistan, enabling the bank to benefit from locally hosted enterprise communication capabilities, dedicated technical assistance and round the clock support.

The Nmail platform, powered by Zimbra and hosted on Nayatel Cloud, is designed to provide businesses and organisations with reliable email communication services while allowing their data to remain within Pakistan.

The partnership reflects growing demand among Pakistani financial institutions and corporate organisations for locally hosted digital solutions that combine operational reliability, technical expertise and greater control over institutional data.

According to details of the agreement, Nayatel will provide the technological infrastructure and technical support required to facilitate the bank's transition to its cloud based email platform.

The service will enable ZTBL to strengthen its institutional communication infrastructure while benefiting from local technical support and enterprise-level email management facilities.

Nmail is being positioned as a Pakistani alternative to international business email platforms, offering organisations access to professional communication services supported by domestic cloud infrastructure.

The platform provides business email hosting, communication management and technical assistance, while its local hosting model is intended to address the requirements of organisations seeking greater control over the location and management of their data.

The agreement is particularly significant for Pakistan's evolving enterprise technology market, where banks, financial institutions and large corporations are increasingly exploring domestic cloud service providers to support essential business operations.

Commenting on the agreement, Sheikh Wajid Mahmood, Executive Vice President of Sales and Marketing at Nayatel, said the partnership demonstrated ZTBL's confidence in the company's enterprise cloud capabilities.

He said Nayatel was pleased to support the bank's communication requirements through a locally hosted solution combining reliable infrastructure, dedicated technical support and data residency within Pakistan.

Mahmood emphasised that the agreement reflected the ability of domestic technology service providers to deliver enterprise communication solutions designed to meet the operational requirements of major organisations.

Inamullah Khattak, Senior Vice President of Public Relations and Media Services at ZTBL, highlighted the importance of reliable business communication in maintaining efficient banking operations.

He said dependable communication systems were essential to the bank's operations and expressed confidence that the partnership with Nayatel would help strengthen ZTBL's email services through local infrastructure and technical expertise.

The five year collaboration also provides Nayatel with an opportunity to expand its presence in Pakistan's financial services technology market and demonstrate the capabilities of its cloud-based enterprise communication solutions.

Nayatel is pursuing similar partnerships with other organisations as part of its efforts to expand the adoption of locally hosted business email and cloud services across different sectors.

The agreement represents a further step towards strengthening Pakistan's domestic digital services ecosystem, highlighting the growing role of locally hosted cloud infrastructure in supporting the communication and technological requirements of financial institutions and corporate organisations.

With increasing emphasis on data residency, operational reliability and responsive technical support, partnerships between financial institutions and domestic technology providers are expected to remain an important component of Pakistan's ongoing digital transformation.

Islamabad | ReNews Pakistan
The federal government has proposed an ambitious plan to increase mortgage financing from less than 0.5% of Pakistan's gross domestic product (GDP) to 5% by 2035, alongside a comprehensive housing and real estate reform framework aimed at expanding homeownership, accelerating residential construction and strengthening the country's property sector.
Under the proposed framework, the government intends to facilitate the construction of 300,000 to 400,000 housing units annually through the House Ownership Plan for Everyone, addressing the growing gap between housing demand and supply across Pakistan.
The proposals were presented by Planning Commission Member Waqas Anwar during the eighth National Economic Mission meeting under the Uraan Pakistan framework, chaired by Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal in Islamabad on October 7.
According to figures presented during the meeting, Pakistan requires approximately 700,000 new housing units annually, while existing supply stands at around 250,000 units, creating an estimated annual shortage of 450,000 homes.
The proposed construction targets are intended to increase housing availability, although achieving even the upper target of 400,000 units would remain below the country's currently estimated annual housing demand.
A major component of the reform framework involves expanding access to institutional housing finance, allowing more prospective homeowners to obtain mortgage loans for residential property purchases and construction.
The proposed increase in mortgage financing to 5% of GDP by 2035 would represent a substantial expansion of Pakistan's currently underdeveloped housing finance market.
The government also plans to modernise property administration by digitising land records, building permits, property valuations and ownership transfers by fiscal year 2028-29.
Additional reforms include introducing one-window construction approvals, establishing secure escrow payment arrangements for property transactions and linking financial incentives to independently verified construction milestones.
These measures are intended to improve transparency, simplify regulatory procedures and strengthen confidence among property buyers, developers and financial institutions.
Addressing the meeting, Planning Minister Ahsan Iqbal emphasised that the housing, construction and real estate sectors could play a significant role in achieving Pakistan's broader economic development objectives.
He highlighted the construction industry's connections with 72 allied industries and its contribution of approximately 9.5% to national employment, underscoring its importance for industrial activity and job creation.
The meeting was informed that Pakistan's urban population had increased from approximately 76 million in 2017 to 94 million in 2023, placing additional pressure on residential infrastructure and urban planning.
Figures presented during the meeting indicated that built-up areas expanded between 2005 and 2022 by 104% in Islamabad, 72% in Quetta, 59% in Lahore, 44% in Peshawar and 43% in Karachi.
Ahsan Iqbal stressed the importance of promoting vertical residential development rather than allowing unchecked horizontal expansion, particularly where expanding urban settlements threaten agricultural land.
He also called for the adoption of modern construction technologies, improved building methods and stronger cooperation between public and private sector stakeholders.
The minister said Pakistan's construction industry should move beyond meeting domestic housing requirements and develop the capacity to compete internationally, attract investment and generate export earnings.
The proposed mortgage financing expansion and housing reforms form part of the government's broader strategy to strengthen economic activity, promote investment in real estate and construction, and improve access to housing.
However, the announced measures remain proposals under the reform framework, with their eventual implementation dependent on detailed policies, financing arrangements and coordination among government institutions, banks and private developers.