Pakistan power sector faces $58 billion investment plan and solar surge

Pakistan is navigating a complex energy transition characterized by massive planned infrastructure investments and a rapid, bottom-up surge in solar adoption. The National Electric Power Regulatory Authority (Nepra) has conditionally approved an Integrated System Plan for 2025-35, which calls for $58 billion in investment for electricity generation and transmission. This plan aims to add 26,045MW of capacity to meet a projected peak demand of 35,521MW by 2035.

However, the plan faces significant scrutiny. All three members of Nepra recorded dissenting or advisory observations, questioning whether the country will actually require the additional capacity. The power sector is currently burdened by unused generation capacity and high capacity payments. There are also conflicting assessments regarding how these investments will impact consumer tariffs.

Parallel to these large-scale planning efforts, Pakistan has experienced a significant shift toward decentralized solar energy. Driven by expensive and unreliable grid electricity rather than government subsidies, solar power grew from contributing less than 1 percent of electricity a decade ago to generating approximately a quarter of the country’s power during peak months in the summer of 2025.