IMF ready to consider plan to cut power prices: PM

ISLAMABAD: Prime Minister Shehbaz Sharif on Wednesday said that the International Monetary Fund (IMF) was ready to give due consideration to Pakistan government’s plan to reduce cost of energy and electricity tariffs.

Addressing the federal cabinet meeting, the prime minister said the during a meeting with IMF Managing Director Kristalina Georgieva, he discussed the power issue and told her that industries could only run and economic growth could be achieved only if the cost of production is reduced, adding that the IMF top official agreed with him and gave a very positive response.

The prime minister said that the IMF MD asked him to share plan with her and she was ready for it. “She was in a very positive mind and they are ready to give our plan a consideration,” he added. He said that concerns over the IMF rejecting a reduction in electricity prices had been eliminated. “The IMF MD asked me to ‘bring your plan and I am ready’,” he said.

Shehbaz said that the IMF head told him that when this programme was being discussed at the IMF forum, there were many negative voices but she took a risk by saying that let bygones be bygones, this time it would be different. “She praised Pakistan in good words and I want commend the finance minister, finance secretary, FBR chairman and other members of the [economic] team,” he said.

He said that any appreciation from the IMF could not come easily, and that the IMF head also praised the deputy prime minister and power minister.

Shehbaz said Saudi Arabia has always been a trusted and brotherly partner, and Pakistan would never compromise on kingdom’s sovereignty, security and territorial integrity. “Pakistan has always talked about sovereignty of Saudi Arabia in bilateral talks and at international fora,” he said.

On his meeting with Sri Lankan president, Shehbaz said Pakistan and Sri Lanka enjoy close brotherly relations. He praised the Sri Lankan government for sending its team of doctors to meet the situation arising out of dengue virus in Pakistan. He said he also invited the Sri Lankan president to visit Pakistan.

The premier reiterated the government’s resolve for taking stern action against elements involved in human trafficking.

Earlier, the prime minister held a meeting with IMF MD Kristalina Georgieva on the sidelines of the World Government Summit (WGS) 2025.

The meeting focused on Pakistan’s ongoing IMF programme and the macroeconomic stability achieved through the government’s comprehensive reform agenda.

The discussions highlighted Pakistan’s commitment to implementing structural reforms and maintaining fiscal discipline, which have been instrumental in restoring economic stability and will be critical in driving sustainable growth, going forward.

Shehbaz underscored the progress made under the IMF’s Extended Fund Facility (EFF), which has played a key role in stabilising Pakistan’s economy, setting it on the path of long-term recovery.

He reaffirmed the government’s resolve to sustaining the reform momentum, particularly in critical areas such as tax reform, energy sector efficiency and private sector development. He assured Georgieva of Pakistan’s commitment to economic prudence, efficiency and sustainability as essential pillars for achieving inclusive and sustained growth.

The IMF top official commended Pakistan’s efforts in effectively implementing the IMF-supported programme, highlighting the country’s improving economic performance with rising growth and declining inflation. She recognised that Pakistan is on the path to growth and has undergone economic recovery.

She also acknowledged Shehbaz’s leadership and personal commitment to driving the country’s reform agenda, which has been critical to achieving economic stability and progress. She reiterated the IMF’s continued support for Pakistan’s reform agenda, emphasizing the importance of sustained fiscal discipline, structural reforms and good governance to ensure long-term economic stability and growth.

Separately, in a post on ‘X’, Georgieva said, “I am encouraged by their strong commitment to Pakistan’s IMF-supported reforms and support their decisive actions.”

These would help pave the way to higher growth and more jobs for Pakistan’s youthful population, she added.

The technical mission of the IMF would be visiting Pakistan by the month end to finalise modalities on Pakistan’s request of $1 billion for climate finance to augment existing $7 billion EFF. This climate finance mission will be arriving in Islamabad on February 24, 2025 and will stay here almost a week.

If the IMF agrees to augment with provision of climate finance, the overall size of the IMF loan would go up from $7 billion to $8 billion.

However, the schedule of the upcoming review mission of the IMF has not yet been finalised as the IMF was engaged in securing internal security clearance. There are expectations that the first review of the IMF mission under EFF programme might occur in the first week of March 2025.

Pakistan has formally requested the IMF to augment its loan through climate finance under the Resilience and Sustainability Facility (RSF). The RSF provides long-term financing to strengthen economic resilience and sustainability by (i) supporting policy reforms that reduce macro-critical risks associated with climate change and pandemic preparedness, and (ii) enhancing policy space and financial buffers to mitigate risks arising from long-term structural challenges.

Climate efforts should prioritise policies that build resilience and adaptation. Analysis indicates that additional ex-ante adaptation investments, equivalent to one percent of GDP annually, could reduce the negative growth impact of natural disasters by one-third, and shorten Pakistan’s post-disaster recovery time. Adaptation efforts should focus on implementing the Climate Public Investment Management Assessment (C-PIMA) Action Plan, adopted in December 2023, to effectively integrate adaptation-focused investments into Pakistan’s overall investment strategy.

Pakistani authorities have made significant progress in implementing the C-PIMA. Key achievements include developing a climate scoring methodology for Public Sector Development Programme (PSDP) projects aligned with the National Adaptation Plan; incorporating climate sensitivity into project planning and building codes; advancing project appraisal methodologies and green budget-tagging capabilities.

To maximise the impact of adaptation efforts, it is critical to simultaneously implement the broader Public Investment Management Assessment (PIMA) technical assistance recommendations from the IMF. Additionally, efforts should continue to leverage the Benazir Income Support Programme (BISP) datasets to calibrate social protection disbursements during disasters and implement the National Disaster Risk Financing Strategy. Robust transparency and accountability safeguards in public procurement would ensure that climate financing achieves its intended purposes and prevents misuse or corruption.

Pakistani authorities aim to leverage the IMF programme and their reform agenda to mobilise sufficient climate financing, with support from development partners and multilateral development banks (MDBs). Key components of these efforts include establishing the Climate Change Authority; preparing the National Disaster Risk Financing Strategy and National Climate Finance Strategy; reorienting policy formulation to embed reforms that create a more integrated and resilient planning and management framework for climate change.

Pakistan plans to establish a national digital dashboard for climate finance by June 2025 to develop a pipeline of climate resilience projects aligned with national priorities. Additionally, the country is developing a green financing taxonomy, Environmental, Social, and Governance (ESG) reporting guidelines, and a green stress-testing framework to assess the impact of climate shocks on financial stability.

These initiatives are expected to be completed by June 2026.

As an active party to the Paris Agreement under the United Nations Framework Convention on Climate Change (UNFCCC), Pakistan is committed to climate mitigation and transition management. Key projects include scaling up the Green Pakistan Programme, which has already planted over 2.1 billion trees with an estimated carbon sequestration potential of 148.8 million tons by 2030, transitioning to a greener energy mix, implementing policies to guide households and firms toward a more carbon-neutral economy through changes in relative prices.

These efforts underscore Pakistan’s commitment to addressing climate change and building a sustainable, resilient future.

During the cabinet meeting, PM Shehbaz directed the relevant authorities to prepare a comprehensive strategy to ensure availability of food items at affordable prices during the holy month of Ramazan.

He emphasised that provision of essential food items to the people at affordable prices was top priority of the government, the PM media office, while quoting the prime minister, said.

“The federal and provincial governments should collaborate to ensure provision of edible items at reasonable prices to the common man,” he said.

The cabinet, on the recommendation of the Ministry of Religious Affairs and Interfaith Harmony, approved the strategy of interfaith harmony policy and religious tolerance.

The forum was informed that a sub-committee presented the recommendation after reviewing the strategy of interfaith harmony policy and religious tolerance. Dialogues and conferences with regard to religious tolerance would be held and public awareness campaigns would also be run under the policy.

An action plan regarding the safety of the rights of religious minorities is also a part of the policy. Furthermore, under the religious tolerance strategy, measures would be taken to prevent hate material and literature besides preparing a plan of action to resolve various sectarian differences.

On the recommendation of the Ministry of Religious Affairs and Interfaith Harmony, the cabinet approved the appointment of Laila Ilyas Kalpana and Satwant Kaur as female members of the Evacuee Trust Property Board (ETPB).

On the recommendation of the Ministry of National Education and Vocational Training, the meeting approved the appointment of Dr Hassan Al-Amin (BS-21) as the Director of National Institute of Pakistan Studies at the Quaid-i-Azam University, Islamabad.

The cabinet was informed that his appointment was made on merit through a transparent system.

The meeting, on the recommendation of the Ministry of Finance, approved the appointment of Tahira Raza as a non-executive member of the State Bank of Pakistan for a period of five years.

On the recommendation of Revenue Division, it approved the signing of the initial draft of convention between the Government of Pakistan and the Government of Iraq regarding the elimination of double taxation on income tax and capital, as well as measures to prevent tax evasion and tax non-compliance. The meeting ratified the decisions made in the Economic Coordination Committee (ECC) meeting held on February 3, 2025.

The meeting also ratified the decisions taken in the Cabinet Committee on Legislative Cases meeting held on the February 7. The meeting also endorsed the decisions taken in the Cabinet Committee on State Owned Enterprises meeting held on February 11.