The government has assured the International Monetary Fund that it will levy another surcharge on electricity to recover Rs 240 billion of syndicated term credit finance from consumers.
According to an IMF report released on Monday, the government promised to impose the surcharge if the National Electric Power Regulatory Authority does not include financing of this syndicated loan in tariff determination.
A syndicated loan is provided by a group of lenders and is structured, arranged, and administered by them.
An IMF staff mission, in its third review report of a 3-year loan arrangement with Pakistan, notes that Pakistani authorities have promised to continue with their plans to bring electricity tariffs to cost recovery levels.
Nepra was working on an increase in electricity tariffs by on average 4 per cent, while eliminating subsidies on industrial, commercial, bulk, and residential consumers above 200kWh of monthly consumption. This tariff adjustment is expected to reduce the electricity subsidies to 0.5 pc of GDP in FY2014/15 from around 1pc in the previous year.
