Pakistan extends PKR 50 billion sovereign guarantee for LNG payments

The Economic Coordination Committee (ECC) of Pakistan’s Cabinet on Monday approved an extension of sovereign guarantees until June 2026 for a PKR 50 billion finance facility obtained by the Sui Northern Gas Pipelines Limited (SNGPL) for liquefied natural gas (LNG) payments.

The approval was granted based on improved cash flows, according to a summary submitted by the Petroleum Division.

The ECC meeting, chaired by Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb, also addressed a Power Division proposal concerning the solarization of 27,000 agricultural tube wells in Balochistan.

The initiative, decided by Prime Minister Shehbaz Sharif on July 2, 2024, carries an estimated cost of PKR 55 billion, with the federal government covering 70% and the Balochistan government providing the remaining 30%.

Officials informed the ECC that PKR 14 billion has already been released for the project, with an additional PKR 24.5 billion now proposed for allocation. Following deliberations, the committee approved the transfer of funds to ensure timely implementation and directed the Power Division to oversee key aspects of the project, including the disconnection of tube wells from the power grid and removal of transformers and fixtures. A progress report is expected in July.

Additionally, the ECC sanctioned several technical supplementary grants across various ministries, including PKR 106 million for the Power Division to support the National Energy Efficiency and Conservation Authority’s (NEECA) fan replacement program.

Designed in collaboration with the State Bank of Pakistan and commercial banks, the program aims to replace 88 million inefficient fans nationwide, potentially reducing peak electricity demand by approximately 5,000 megawatts.

The committee also received an update on the governance reforms of electricity distribution companies (DISCOs). The ECC was informed that boards of directors for all DISCOs had been reconstituted, except for SEPCO and HESCO, where final approvals are pending.

A monthly performance review mechanism has been implemented to assess operational, commercial, and financial indicators, and strategic roadmaps aligned with the National Electricity Policy were signed in February 2025.

The meeting was attended by Minister for Power Sardar Awais Ahmed Khan Leghari, Minister for Investment Qaiser Ahmed Sheikh, federal secretaries, and senior officials from relevant ministries and divisions.