Real Estate Insights

Pakistan’s electricity challenge is no longer limited to how much power the country can produce. The more pressing questions are when that electricity is available, which source produces it and how quickly generation can respond when demand rises.
Nearly 125 billion units of electricity were generated for the national grid during the financial year 2025-26, an increase of only 1.5 percent over the previous year. The overall number appears relatively stable, but the generation mix reveals a major change taking place inside the electricity system.
Hydropower generation reached a record level of nearly 40 billion units and contributed about 31 percent of total grid electricity. This large supply of low-cost power helped contain average generation costs, but it could not fully resolve the new challenge emerging during evening hours.
The challenge is timing, not only supply
Solar systems are spreading rapidly across homes, shops, offices, farms and industrial facilities. During daylight hours, many consumers produce a significant portion of the electricity they need through their own solar panels.
This does not necessarily mean that electricity consumption has disappeared. It means that part of the consumption has moved away from the national grid and behind the consumer’s electricity meter.
Government estimates indicate that rooftop solar installations across Pakistan have exceeded 20,000 megawatts. Behind-the-meter solar capacity has been estimated at around 12,000 to 14,000MW and could be even higher. This rapidly growing capacity has significantly reduced the electricity consumers draw from the grid during sunny hours.
The position changes after sunset. Homes continue using lights, fans and air conditioners, while shops and commercial activities remain operational. Solar generation, however, falls rapidly and eventually stops.
A large volume of demand then returns to the national grid within a relatively short period. This pattern of weak daytime grid demand followed by a steep evening increase is commonly described as the “duck curve”.
Why was more coal needed despite record hydropower?
An important question arises from the annual generation figures. If hydropower production was at a record level, why did Pakistan have to generate substantially more electricity from imported coal?
One major reason was the shortfall in electricity generated from imported liquefied natural gas, or RLNG.
RLNG-based generation ended the year around 19 percent below the planned reference level, leaving a shortfall of almost four billion units.
Modern RLNG plants can play an important role in meeting changes in grid demand because their output can generally be adjusted more easily than that of traditional baseload plants. However, limited fuel availability prevented the system from obtaining the planned level of RLNG generation.
Imported-coal generation was increased to fill the gap. It finished approximately 43 percent above the planned reference level, producing almost four billion additional units.
Coal plants are not simply switched on when the sun sets. Instead, they may have to remain operational for longer periods so that dependable thermal generation is available when evening and nighttime demand rises.
What the economic merit order shows
The Independent System and Market Operator, or ISMO, arranges available power plants according to their incremental generation cost. This ranking is known as the economic merit order.
In simple terms, the system first attempts to obtain electricity from plants with lower variable costs. As electricity demand rises, plants placed further down the list, with higher generation costs, may also have to be dispatched.
ISMO’s website lists economic merit orders for July 2026, including separate publications for July 5 and July 12. Its market data section also provides 2026 datasets comparing marginal prices with electricity demand, along with separate marginal-price information.
The marginal price can be understood as the cost associated with the final generating plant needed to meet demand during a particular period. When evening demand requires a higher-cost plant to enter the system, the marginal cost of electricity for that period may rise.
A costly plant is not always an off-merit plant
It would be misleading to assume that every expensive power plant is operated unnecessarily or in violation of the merit order.
The system operator may have to dispatch a particular plant to maintain voltage, manage a transmission limitation, replace an unavailable generator or protect the stability of the grid in a specific region.
ISMO therefore publishes system reports alongside the economic merit order, including information on plants operated for system security and under security-constrained dispatch. These reports are essential for distinguishing between a plant dispatched because of its cost ranking and one operated because of a technical or grid-security requirement.
Solar is lowering costs, but the grid needs flexibility
It would be wrong to describe solar power itself as the problem.
Solar is providing consumers with lower-cost daytime electricity, reducing their reliance on imported fuels and easing pressure on the grid during sunny hours.
The real difficulty is that Pakistan’s electricity system was largely designed for a period when consumer demand was more predictable and most electricity was supplied directly through the national grid.
Today, grid sales decline during the day, but sufficient generation capacity must still be kept available to serve consumers after sunset. The system must therefore maintain coal, gas, RLNG, hydropower and other plants even though consumers may purchase fewer grid units during daylight hours.
The question that matters to consumers
The increased use of imported coal despite record hydropower shows that producing cheap electricity is not enough. The electricity must also be available at the time consumers need it.
If abundant solar and hydropower are available during the day but cannot be stored for evening use, the system must return to conventional thermal plants after sunset.
Possible responses include battery storage, pumped hydropower, better forecasting of distributed solar production, cheaper daytime electricity for industry, incentives for consumers to shift demand and sufficient flexible generation to respond to the evening increase.
Why greater data transparency matters
Publishing total demand and marginal prices is an important start, but a complete public record should also show hourly gross demand, demand remaining after distributed solar, the fuel mix, the plant setting the marginal price and the reason for operating any plant outside the normal merit order.
This would allow consumers and researchers to identify the hour in which demand rose most sharply, the higher-cost plant that entered the system and whether its operation was caused by fuel shortages, transmission restrictions, technical requirements or weak planning.
The central lesson from the financial year 2025-26 is clear. Pakistan is moving from a simple electricity-supply problem towards a challenge involving timing, flexibility and storage.
Even record hydropower generation cannot eliminate imported-fuel dependence unless low-cost daytime electricity can be shifted to the evening.
Slowing the solar transition is not the answer. Pakistan needs a grid capable of storing cheap daytime power, delivering it after sunset and using expensive imported fuels only when no lower-cost alternative is available.

World Habitat Day 2026 has been observed against the backdrop of a deepening global housing crisis in which safe, adequate and affordable shelter remains beyond the reach of billions of people. This year’s theme, “Adequate Housing for All,” has renewed attention on the principle that housing is not merely a roof and four walls but a fundamental requirement for human dignity, security, health, education, employment and social stability. Across the world, rapidly growing cities, rising land and construction costs, conflict, climate change and displacement are making adequate housing increasingly difficult to secure, particularly for low-income households.

In his message marking World Habitat Day, United Nations Secretary-General António Guterres said adequate housing is the foundation of dignity, security and opportunity, yet more than three billion people are denied this universal human right. More than one billion people are living in slums and informal settlements, while many others are facing homelessness or displacement caused by wars, disasters and climate-related emergencies.

Guterres stressed that investment in adequate housing and the upgrading of informal settlements can play an important role in reducing poverty, addressing inequality, strengthening climate resilience and building more peaceful and inclusive societies. He also called for coordinated policies at national and local levels, stronger partnerships, better data and affordable financing for developing countries so that housing can be treated as a public good rather than a privilege available only to those with sufficient financial means.

Against this wider global backdrop, World Habitat Day 2026 also brought significant recognition for Pakistan, particularly Punjab. The United Nations Human Settlements Programme, UN-Habitat, awarded the 2026 UN-Habitat Scroll of Honour to the Punjab Housing and Town Planning Agency for its contribution to expanding access to adequate, safe and affordable housing for low-income households.

The recognition is closely associated with the Punjab government’s flagship Apni Chhat, Apna Ghar programme, which has been designed to support lower-income families seeking to build their own homes. The award places Punjab’s housing initiative among internationally recognised efforts aimed at making affordable shelter more accessible to groups that are often excluded from conventional housing finance and formal property markets.

Punjab Chief Minister Maryam Nawaz Sharif travelled to Muscat, Oman, to receive the Scroll of Honour during the World Habitat Day ceremony. She dedicated the award to the families who have built or are building homes under the Apni Chhat, Apna Ghar programme. The recognition is particularly significant because Pakistan has received the UN-Habitat Scroll of Honour again after a gap of 19 years.

For Punjab, the award comes at a time when Pakistan is confronting serious housing pressures caused by rapid population growth, urban migration, rising land prices, increasing construction costs and the limited purchasing power of low-income households. These challenges demonstrate that affordable housing cannot be addressed simply by increasing the number of houses constructed. Adequate housing also requires secure land tenure, access to water and sanitation, roads, electricity, schools, healthcare, public transport and employment opportunities.

The broader message of World Habitat Day is therefore that housing policy must be connected with urban planning, infrastructure, social protection and access to finance. A house becomes truly adequate only when the people living in it can also access essential services, feel secure in their tenure and remain protected from environmental, economic and social risks.

At the same time, the situation in Gaza presents one of the starkest contrasts to the global call for adequate housing. According to Palestinian sources, approximately 82 percent of buildings in Gaza have been damaged or destroyed as a result of Israeli bombardment. Large numbers of people have been forced from their homes and are living in temporary shelters, tents, damaged buildings or areas with severely limited access to basic services.

The destruction has extended far beyond residential structures. Water systems, sewage networks, healthcare facilities and other essential urban infrastructure have also suffered extensive damage, creating a humanitarian crisis in which people are struggling not only to find shelter but also to secure the basic conditions required for safe and dignified living.

In this context, World Habitat Day carries a much broader meaning. It is not only about building new homes but also about protecting civilians, preventing displacement, rebuilding communities destroyed by conflict and restoring the basic infrastructure needed for human life.

World Habitat Day 2026 therefore presents two sharply different realities. Punjab’s international recognition demonstrates how targeted public policy, financial support and housing programmes can improve access to homes for lower-income families. Gaza, on the other hand, shows how quickly the basic right to shelter can be destroyed by conflict and displacement.

The central message of the day remains clear: adequate housing should not be treated as a privilege for those who can afford it, but as a fundamental human right. Governments need policies that go beyond simply increasing housing supply and instead ensure access to safe, affordable, sustainable and dignified homes. With more than three billion people still deprived of adequate housing worldwide, the global housing crisis has become not only an urban development challenge but also a major social, economic and humanitarian issue.

Ten years have passed since the Panama Papers exposed the scale and complexity of the global offshore financial system, yet the basic infrastructure that enables financial secrecy and anonymous ownership has not been completely dismantled. Over the past decade, however, governments and international institutions have introduced a range of reforms aimed at improving beneficial ownership transparency, tax information exchange and accountability within the financial system.

According to a 2026 review by Transparency International, the Panama Papers brought unprecedented attention to the mechanisms used to conceal the true ownership of companies, assets and financial structures. The revelations highlighted the role of anonymous shell companies, nominee directors and complex offshore arrangements in creating layers of legal and corporate ownership that can make it difficult to identify the individuals who ultimately control or benefit from assets.

The Panama Papers consisted of 11.5 million leaked documents containing information linked to offshore entities and financial networks across around 200 countries and territories. The scale of the leak made it one of the most significant disclosures of confidential financial information and transformed public understanding of how offshore structures operate across borders.

The consequences were not limited to financial institutions and corporate structures. The revelations also produced major political consequences in several countries. In Iceland, Prime Minister Sigmundur David Gunnlaugsson resigned following political pressure after information connected to the Panama Papers became public.

Pakistan also witnessed significant political and legal consequences. Issues emerging from the Panama Papers led to investigations and eventually reached the Supreme Court. In July 2017, the Supreme Court disqualified then Prime Minister Nawaz Sharif from holding office. The case became one of the most consequential political and legal developments in Pakistan following the global leak.

At the international level, the Panama Papers increased pressure on governments to strengthen systems designed to identify the real owners of companies. Transparency International says that countries including the United Kingdom moved to establish or strengthen registers containing information on beneficial ownership. The objective was to make it more difficult for individuals to conceal their control of companies behind nominee directors, corporate structures or other legal arrangements.

The European Union also moved to strengthen requirements relating to ownership transparency. At the same time, the G20 and the Organisation for Economic Co operation and Development, or OECD, continued efforts to improve tax transparency and the exchange of financial information between jurisdictions.

These measures were intended to reduce opportunities for tax evasion, money laundering and other forms of financial crime that can take advantage of differences between national legal systems. Greater cooperation between tax authorities and financial regulators has also become an important part of international efforts to identify assets and income held across borders.

The United States also introduced measures relating to corporate ownership and anti money laundering requirements. Such reforms sought to improve the availability of information about the individuals who ultimately own or control companies and to strengthen the ability of authorities to investigate financial crime.

Mossack Fonseca, the Panama based law firm at the centre of the Panama Papers, also became a symbol of the consequences of the revelations. Following international pressure and legal challenges, the firm closed in 2018. Its closure, however, did not mean the end of the offshore financial system. Similar structures continue to exist in different jurisdictions around the world.

Transparency International notes that a number of traditional offshore centres still provide legal and corporate structures that can make it possible to conceal beneficial ownership. Companies, trusts and other entities can still be organised through multiple jurisdictions, creating layers of ownership that may complicate efforts to identify the ultimate beneficiaries.

A decade after the Panama Papers, the central issue has therefore shifted from simply exposing hidden financial structures to ensuring that information about their real owners can be effectively accessed and used by authorities. The existence of a beneficial ownership register alone may not be sufficient if the information is incomplete, outdated or difficult for relevant agencies to obtain.

Transparency International has called for further improvements in access to beneficial ownership information, greater transparency concerning companies and trusts, stronger accountability for financial intermediaries, improved cross border legal cooperation and more effective mechanisms for recovering illicit assets.

The Panama Papers changed the global debate over financial secrecy by demonstrating the scale of the structures used to conceal ownership and move assets across jurisdictions. Over the past ten years, governments and international organisations have taken significant steps towards greater transparency. Yet the continued existence of offshore structures shows that the basic architecture of financial secrecy has not disappeared.

The challenge for the next decade will be to ensure that transparency rules work in practice rather than only on paper. Identifying the individuals who ultimately own or control assets, holding financial intermediaries accountable and enabling authorities to cooperate effectively across borders are likely to remain central issues in the global effort to make the financial system more transparent.

Smaller provinces may improve administrative access, but without meaningful political, financial and administrative devolution, Pakistan risks creating more centres of power rather than bringing government closer to citizens
Pakistan’s governance crisis is becoming increasingly difficult to ignore. A country of nearly 250 million people is being administered through structures that often appear too centralised, too distant and too slow to respond to the everyday needs of citizens.
This has revived an important national debate: should Pakistan create new provinces and smaller administrative units to improve governance?
The question deserves serious consideration. But before boundaries are redrawn, another question must be answered. Will new provinces actually decentralise power, or will they simply reproduce the same governance problems within smaller geographical areas?
The argument for smaller provinces has considerable merit. Provinces with populations running into tens of millions can themselves become highly centralised systems. Political authority, financial resources and administrative decision making often remain concentrated in provincial capitals, leaving remote districts with limited influence over decisions that directly affect them.
Smaller administrative units could reduce the distance between citizens and government. They could allow regional priorities to receive greater attention, make public institutions more responsive and provide communities that feel politically neglected with a stronger voice.
South Punjab has long been at the centre of demands for a separate province. Islamabad could also be considered within a wider debate over administrative restructuring, while other proposals may deserve examination on the basis of population, geography, economic viability and administrative efficiency.
But creating a province is far more complicated than drawing new lines on a map.
Any alteration in the federal structure would involve constitutional procedures, political consensus and, where provincial boundaries are affected, approval by the relevant provincial legislature. New provincial governments would require assemblies, cabinets, secretariats, administrative departments and bureaucratic structures.
There would also be significant financial consequences.
Each new province would require a share of national resources. Revenue distribution arrangements would have to be reconsidered, while questions involving assets, liabilities, government employees, public institutions and development responsibilities would need to be resolved.
Before Pakistan moves towards such a major restructuring, policymakers should therefore present credible estimates of the costs involved and measurable evidence of the governance benefits expected from the change.
There is an even more fundamental issue.
If the political and administrative culture remains unchanged, smaller provinces could simply become smaller versions of the existing system. Power may shift from one provincial capital to several new provincial capitals without ever reaching districts, towns and neighbourhoods.
New bureaucracies could reproduce old bureaucratic weaknesses. New political elites could control resources in much the same way as existing ones. Citizens could still remain dependent on distant offices for decisions concerning local services.
This is why the debate over new provinces cannot be separated from the debate over local government.
Pakistan already has a constitutional and administrative mechanism capable of bringing government significantly closer to citizens: empowered local governments.
Municipalities, districts and local councils deal with many of the services that shape daily life, including local roads, sanitation, water supply, land use, municipal regulation, public spaces and community infrastructure. Yet local government remains one of the weakest parts of Pakistan’s democratic structure.
Provincial governments have historically shown limited willingness to transfer meaningful political, administrative and financial authority to elected local institutions.
This creates an obvious contradiction.
Political parties strongly defend provincial autonomy when powers and resources are being transferred from Islamabad to the provinces. Yet the same principle becomes far less attractive when provincial capitals are asked to transfer authority and money to districts, cities and neighbourhoods.
The reason is partly political.
An empowered local government system distributes control over development funds, public services and administrative decisions. It places resources closer to voters and reduces the dependence of communities on provincial legislators and party leadership structures.
Those who currently exercise these powers therefore have little political incentive to surrender them.
This does not mean that Pakistan should reject the idea of new provinces. Demographic growth, regional inequalities and administrative pressures may eventually make additional provinces necessary.
The debate may, in fact, already be overdue.
But any serious proposal must go beyond slogans. It should identify the proposed boundaries, explain the constitutional process, calculate the financial cost, assess the economic viability of each new unit and demonstrate how public services would improve.
Most importantly, any restructuring plan should explain how authority will continue moving downward after a new province is created.
Pakistan may indeed need a different administrative map. But changing the map alone will not repair governance.
The real test of reform is not how many provinces appear on the map. It is how close political authority, public money and decision making ultimately move towards the citizen.
If new provinces merely create additional capitals where power remains concentrated, Pakistan will have reorganised centralisation rather than eliminated it.
A meaningful reform would do something more ambitious: redraw not only administrative boundaries, but also the relationship between the state and the citizen.

The $314.93 million Sindh Barrages Improvement Project has made substantial progress on physical rehabilitation and modernisation works at Guddu and Sukkur barrages. Yet the World Bank has downgraded the project’s development objective and implementation progress ratings from “Satisfactory” to “Moderately Satisfactory”, while retaining the overall risk rating at “Substantial”.
At first glance, the downgrade appears difficult to reconcile with the project’s physical achievements. By July 2026, around 84% of rehabilitation and modernisation works at the two barrages had been completed, while the disbursement rate had reached 82.25%. The replacement of the main gates at Sukkur Barrage has been completed, and significant rehabilitation work has also been carried out at Guddu.
The World Bank’s concern, however, is not primarily about the concrete, gates or structures. It is about whether the institutions responsible for operating and maintaining this critical infrastructure are developing quickly enough to protect the investment over the long term.
This distinction reflects a recurring weakness in major development projects in Pakistan. Construction progress is relatively easy to measure. The number of gates replaced, contracts awarded, funds disbursed and physical works completed can all be recorded and reported. Building institutions capable of managing the same infrastructure effectively for decades is considerably more difficult. It requires trained staff, clear responsibilities, accountability, reliable maintenance systems and sustained administrative and political attention.
The Sindh Barrages project illustrates this gap clearly. The operations and maintenance performance score improved only marginally, from 40 in December 2025 to 44 in July 2026, against a target of 90 by June 2028. The figures suggest that institutional and operational improvements are moving far more slowly than the physical rehabilitation works.
Progress on the calibration of canal head regulators has also been slow. The Barrage Management Unit has yet to award a performance based maintenance contract, while the World Bank has pointed to limited progress in establishing a standard methodology for sediment monitoring.
These may appear to be secondary technical matters compared with the replacement of major barrage gates, but they are central to the long term value of the investment. A modernised barrage cannot deliver its intended benefits if its equipment is not properly maintained, water control systems are not accurately calibrated, or sediment and flood risks are not incorporated into routine management decisions.
This is why the World Bank has warned that slow institutional reforms could pose a risk to the sustainability of the investment. The issue is particularly important because Guddu and Sukkur are not isolated infrastructure projects. They are central components of Sindh’s irrigation system and directly influence water management, agriculture and the economic activity of millions of people.
Their importance is expected to increase as Pakistan faces growing climate-related risks, including more severe floods and changing water patterns. One of the project’s major objectives is to increase the flood passage capacity of Guddu and Sukkur barrages from 900,000 cusecs to 1.2 million cusecs. Climate resilient infrastructure under the project is expected to benefit around five million people.
A failure to maintain these systems effectively would therefore have consequences far beyond the project’s balance sheet. Weak operations, delayed maintenance or inadequate emergency preparedness could eventually undermine the benefits of the substantial investment being made today.
There has nevertheless been meaningful progress. The replacement of Sukkur Barrage’s main gates has been completed, major rehabilitation works have advanced at Guddu, and technical studies for long term flood and sediment management at Sukkur have been completed. Emergency preparedness plans for three barrages have also been prepared and reviewed.
The challenge now is to translate these studies and plans into functioning institutional systems. Flood and sediment management recommendations need to be implemented, emergency plans must be effectively communicated among barrage authorities and local administrations, maintenance arrangements need to be finalised, and operations and maintenance performance must move toward the target of 90.
The World Bank’s downgrade should therefore be viewed less as a final verdict and more as an early warning. With the revised completion date extending to June 2028, there is still time to correct the institutional weaknesses. But the remaining period cannot be focused exclusively on completing physical works.
The Sindh government and relevant agencies will need to demonstrate measurable progress in operations, maintenance, regulator calibration, performance based maintenance arrangements and emergency preparedness alongside construction achievements.
Ultimately, the success of the Sindh Barrages Improvement Project will not be determined simply by how many gates are replaced or how much money is spent. The real test will begin after contractors leave the site. The infrastructure will only remain a successful long term investment if the institutions responsible for operating and maintaining it are strong enough to preserve its value for decades to come.

The Hague arbitration findings reinforce the treaty’s legal status and underline the importance of international agreements in managing water disputes between Pakistan and India
The Indus Waters Treaty is far more than an agreement dividing river waters between Pakistan and India. It is one of the most important international legal frameworks governing relations between two long-standing rivals. Despite wars, political crises and decades of tensions, the treaty survived for generations. That history makes the latest legal findings by the Permanent Court of Arbitration in The Hague particularly significant for Pakistan and for the wider principle of international treaty law.
At the heart of the dispute is a fundamental question: can a country unilaterally suspend or disregard an international agreement because of political or security-related grievances? The arbitration findings provide important clarification on this issue by maintaining that the Indus Waters Treaty remains legally operative and that the obligations created under it continue to apply. This includes obligations concerning the design and operation of Indian hydropower projects on the western rivers.
Pakistan has consistently argued that disputes over the Indus, Jhelum and Chenab rivers should be addressed through the mechanisms established by the treaty rather than through political pressure or unilateral action. That principle is central to the treaty itself. It created a rules-based system under which disagreements could be addressed through bilateral mechanisms, a neutral expert or arbitration, depending on the nature of the dispute.
For Pakistan, the issue has enormous economic and social importance. The country’s agriculture, food security, hydropower generation and the livelihoods of millions of people are closely linked to the Indus River system. Any serious disruption to the availability or management of these waters could therefore have consequences far beyond diplomacy. It could affect agricultural production, energy supplies and economic stability.
The legal findings are also important because they challenge several arguments that could otherwise be used to justify suspending the treaty. The court’s conclusions indicate that Pakistan’s alleged failure to agree to amendments did not amount to a material breach that would terminate its obligations. The findings also indicate that allegations related to terrorism cannot, by themselves, provide a legal basis for suspending a treaty that specifically establishes rights and obligations concerning the waters of the Indus system.
The dispute surrounding the Ratle hydropower project adds another important dimension. Pakistan has raised concerns for years about the design and operation of Indian projects on the western rivers. Interim measures in the arbitration process are significant because they seek to prevent irreversible developments from affecting the dispute before the relevant legal process reaches its conclusion. In water disputes, the consequences of construction decisions can extend far into the future, making such safeguards particularly important.
At the same time, the legal findings should not be viewed as the final solution to the broader Pakistan India water dispute. Courts and arbitration bodies can clarify legal obligations, but they cannot replace diplomacy or day to day institutional cooperation. A treaty can provide the rules, but those rules ultimately require communication and mechanisms through which both sides can address technical and operational concerns.
India’s rejection of the Permanent Court of Arbitration’s jurisdiction adds another layer of complexity. However, disagreement with an international legal process does not automatically eliminate the principles governing international agreements. If states were free to accept treaty obligations when convenient and disregard them whenever political circumstances changed, the reliability of international agreements would be seriously weakened.
The history of the Indus Waters Treaty demonstrates why rules-based agreements matter. Pakistan and India have remained deeply divided on numerous political and security issues, yet the water framework continued to provide a mechanism for managing one of their most sensitive shared resources. That resilience is itself an important lesson for international diplomacy.
For Pakistan, the next step should therefore involve a combination of legal preparedness, close monitoring of developments on the western rivers and efforts to restore meaningful institutional engagement under the treaty. A strong legal position is important, but long-term water security also requires technical cooperation and sustained diplomacy.
The broader lesson extends beyond South Asia. Water is increasingly becoming a strategic resource in a world facing population growth, climate change and growing pressure on freshwater supplies. The Indus Waters Treaty shows that even countries with deeply hostile relations can create rules for managing shared natural resources. Its future should therefore be shaped by law, responsibility and dialogue rather than by unilateral political pressure.
Ultimately, the significance of the arbitration findings lies not only in their immediate implications for Pakistan and India but also in the wider principle they reinforce: international agreements derive their value from the stability of their obligations. If the Indus Waters Treaty is to continue serving its purpose, both countries must preserve the rules based framework that has helped manage their shared rivers for decades.

Pakistan’s power sector is facing a striking contradiction. On one side, hydropower generation has crossed 7,000 MW during the monsoon as higher river flows have improved water availability. On the other, Punjab is reportedly facing a power shortfall of up to 4,000 MW, with load shedding increasing in several areas. The central question is simple: if Pakistan has access to large amounts of relatively low cost hydropower, why does the country continue to depend so heavily on thermal generation?
Pakistan has an installed power generation capacity of around 49,651 MW. However, installed capacity does not mean that the same amount of electricity is available to the national grid at all times. Actual generation depends on fuel availability, water levels, plant performance, transmission capacity and the financial health of the power sector.
The reported shortfall in Punjab highlights this gap between installed capacity and actual generation. Shortages of gas and oil have reportedly forced several power plants to operate below capacity, reducing electricity available to the grid and increasing load shedding across parts of the province. Lahore has also reportedly faced a shortfall of more than 1,000 MW in the distribution system.
The situation becomes more significant because hydropower generation has been rising at the same time. Higher monsoon river flows have boosted production from major projects including Tarbela, Mangla, Ghazi Barotha, Warsak and Chashma.
Hydropower has a major cost advantage. Once a hydropower project is built, its generation does not require a continuous supply of expensive imported fuel in the same way that oil and gas based plants do. When water is available, hydropower can therefore provide large volumes of relatively low cost electricity and reduce the need for expensive thermal generation.
The problem, however, is not simply a lack of generating capacity. It is the way Pakistan manages and balances its different sources of electricity.
Thermal power remains an important part of the national electricity system because it can provide dispatchable generation when demand rises or when other sources are unavailable. But the cost becomes a major concern when thermal plants have to operate extensively despite the availability of cheaper alternatives.
Pakistan’s dependence on thermal generation also creates vulnerability to fuel supply disruptions. If gas or oil is unavailable, thermal plants cannot operate at full capacity regardless of how much installed capacity exists on paper. This is precisely why the country can have nearly 49,651 MW of installed generation capacity and still experience significant shortages.
Hydropower presents a different challenge. Its availability depends heavily on seasonal water flows. During the monsoon, river levels increase and hydropower output can rise sharply. During drier periods, generation can decline. This means hydropower cannot simply replace every other source of electricity throughout the year.
The solution therefore is not to eliminate thermal power, but to use each generation source according to its economic and operational advantage. Hydropower should be maximised when water is available, while thermal generation should increasingly serve as a balancing and backup source where economically practical.
This makes investment in water storage particularly important. Projects such as Tarbela and Mangla can play a greater role in managing seasonal water availability, while expansion and rehabilitation of existing hydropower facilities can increase output without requiring an entirely new generation system.
Pakistan also needs stronger transmission infrastructure. Producing cheap electricity is not enough if the power cannot be transported efficiently to areas where demand is highest. Better transmission planning can allow more hydropower to reach major consumption centres and reduce the need for expensive local thermal generation.
The current situation therefore raises a broader policy question. Pakistan does not necessarily have a simple shortage of power plants. It has a shortage of reliable and affordable electricity at the right place and the right time.
If hydropower can exceed 7,000 MW during the monsoon while Punjab simultaneously faces a reported shortfall of up to 4,000 MW, the challenge clearly goes beyond generation capacity. Fuel supply, water management, transmission constraints, plant utilisation and sector finances all matter.
For Pakistan, the strategic priority should be to make maximum use of the cheapest available sources while maintaining enough flexible generation to protect the grid during periods of low water availability.
The real question for policymakers is therefore not simply how to generate more electricity. It is how to ensure that the electricity Pakistan already has, particularly low cost hydropower, is used as efficiently as possible before turning to more expensive thermal generation.
That shift could have a direct impact on electricity costs, industrial competitiveness and Pakistan’s long term energy security.

Pakistan’s rapidly expanding rooftop and distributed solar market is beginning to reshape not only the country’s energy system but also the economics of residential, commercial and industrial property. According to new analysis by the Pakistan Solar Association, distributed solar supplied nearly 27% of all electricity generated in Pakistan during fiscal year 2025, with approximately 51 terawatt-hours of generation not appearing in official grid side data.
The gap exists because a large share of Pakistan’s solar capacity is installed behind the meter, on homes, shops, offices, factories and agricultural properties. Electricity generated by these systems can be consumed directly on site without passing through the conventional grid, meaning distribution companies do not see the full scale of generation or underlying electricity consumption.
One of the clearest signs of the transformation can be seen in electricity demand patterns. Analysis of half hourly data from Lahore Electric Supply Company shows a rapidly deepening decline in grid demand during peak sunlight hours.
According to the Pakistan Solar Association, the midday demand profile was relatively flat at around 2.2 GW in 2024, but fell to approximately 765 MW in 2026. At the same time, demand rises sharply into the evening as solar generation declines, with the LESCO network recording an increase of more than 1.1 GW over roughly four hours.
The pattern demonstrates how rooftop solar is changing the traditional relationship between electricity consumption and the national grid.
The implications extend well beyond electricity markets. Pakistan’s solar expansion is increasingly turning rooftops into productive economic assets.
For residential property, a roof with sufficient space and structural capacity for solar panels can become an additional selling point. Homes capable of generating their own electricity may become increasingly attractive to buyers and tenants facing high utility costs.
The same trend is potentially even more significant in commercial and industrial real estate. Warehouses, factories, retail buildings and large office properties often have extensive roof areas that can be converted into distributed generation assets.
This creates a new dimension of property value: not simply how much floor space a building provides, but how much energy it can generate and how much electricity it can consume directly.
The Pakistan Solar Association also warns that the challenge is not limited to unrecorded generation. Parts of new electricity demand are also becoming less visible to network operators.
The growing electrification of two and three wheeled vehicles, which account for a significant portion of Pakistan’s electric vehicle transition, could create additional electricity demand that needs to be incorporated into future network planning.
This means Pakistan is experiencing two changes simultaneously: conventional grid demand is being displaced by behind the meter solar, while new forms of electricity consumption are emerging across homes, businesses and transport.
The association argues that failing to accurately capture distributed generation and new demand can lead to forecasting errors and inefficient investment in generation and network infrastructure.
Its research paper, Pakistan’s Solar Revolution: Scale, Blind Spots, and the Path to DER Aware Planning, recommends that Pakistan draw lessons from international approaches, including Australia’s integrated system planning and the United Kingdom’s focus on flexibility across transmission and distribution networks.
The central issue is visibility. A grid designed around a relatively predictable flow of electricity from large power plants to consumers becomes harder to manage when millions of properties begin producing electricity themselves.
For Pakistan’s real estate industry, the solar transition could gradually make energy performance a more important component of property value.
Developers may increasingly need to consider rooftop capacity, solar orientation, energy storage, electrical infrastructure and building efficiency when designing new projects. Buyers and investors may also begin evaluating properties according to their ability to reduce dependence on grid electricity.
This could eventually create a new category of property differentiation: buildings that are not only well located and efficiently designed, but also capable of generating and storing a meaningful share of their own electricity.
Pakistan’s solar adoption has been driven by a combination of high electricity costs, cheaper solar modules and persistent power shortages, according to the association’s analysis. The speed of the transition has nevertheless outpaced the ability of traditional energy statistics and planning systems to capture it.
Pakistan’s solar revolution is no longer simply an energy story. As rooftops become productive assets and buildings increasingly generate their own electricity, solar capacity, energy efficiency and power independence could become increasingly important factors in determining the future value of residential, commercial and industrial real es tate.

Punjab’s decision to establish a dedicated authority for identifying, managing and generating value from underused public assets could represent an important development for both the province’s real estate sector and its public finances. Government land, buildings and other properties are spread across provincial departments, autonomous institutions and public organisations. Some assets remain underutilised, some may be affected by encroachment or informal occupation, while others may not have been properly assessed for their current market value or future development potential.
At a time when the province faces continuing financial demands for infrastructure, urban development, education, healthcare and other public services, improving the management of existing government property could become an important economic strategy. The proposed Punjab Assets Management Authority could provide a mechanism for treating public land and property not simply as entries in departmental records, but as assets with economic, social and development potential.
One of the most important elements of the proposed framework is the development of a comprehensive digital inventory supported by a GIS based database. In a province as large as Punjab, asset records may be scattered across different departments and administrative systems. Ownership of a property may be recorded by one institution, its use may be controlled by another and its administrative management may fall under a third authority. A central digital system could help create a clearer picture of public assets by identifying their location, legal status, current use and possible market value.
However, improving asset management should not mean selling every valuable government property. A modern asset management strategy must determine the highest and most appropriate use of each asset. Some land may be needed for future hospitals, schools, parks, transport infrastructure or other public services. Other properties could generate long term value through leasing, joint development projects or partnerships with private investors.
From a real estate perspective, a more organised approach to government assets could also create new investment opportunities. Underused land in major urban centres may have potential for commercial, residential, industrial or mixed use development. Instead of selling land outright, the government could retain ownership of strategically important property while allowing private developers to participate in construction and operations. Such arrangements could create economic activity and recurring revenue while preserving long term public ownership.
The greatest test for the entire initiative, however, will be transparency. Government property is politically and economically sensitive, particularly when valuable land or commercial assets are involved. If valuations are not conducted independently or if disposal and leasing decisions are not carried out through open and competitive procedures, the reform could quickly lose public confidence.
Major transactions should therefore be supported by clear public information. Market valuations, valuation methods, reserve prices, bidding rules, successful bidders and final financial terms should be open to scrutiny. A digital platform could help make information about important assets and transactions more accessible, strengthening both public accountability and investor confidence.
Accountability should also extend beyond annual financial audits. The performance of the authority should be measured through clear and publicly available results. How many assets have been identified? How much land has been surveyed? How many encroached properties have been recovered? How many development projects have been approved, and how much revenue has been generated? Regular quarterly or semiannual reports could provide answers to these questions and allow citizens to assess whether the authority is creating real value or simply adding another layer to the provincial bureaucracy.
There is also a significant institutional risk. Pakistan has seen a number of reform bodies and task forces launched with ambitious objectives but weakened by overlapping authority, bureaucratic resistance, political intervention and poor implementation. To avoid the same outcome, the Punjab Assets Management Authority will require clear legal powers, effective access to information and professional expertise in real estate, finance, urban planning, law, valuation and technology.
Ultimately, the authority should be judged not by its establishment but by its results. If Punjab succeeds in developing a comprehensive record of public assets, determining their actual value, recovering encroached property and converting underused assets into transparent sources of revenue or public benefit, the initiative could become an important reform in provincial real estate and financial management.
If transparency weakens or the institution becomes another administrative layer without measurable outcomes, however, a significant opportunity could be lost.
The concept of transforming Punjab’s underused public assets into a more productive portfolio is strong. Its real success will depend on accurate records, independent valuation, transparent decision making, effective oversight and measurable results.