Pakistan’s energy story is not one of light but of darkness. It is a tale of betrayal written by the hands of those who were meant to safeguard the nation. When the World Bank arrived in South Asia in the 1990s with its template for Independent Power Producers, Pakistan’s policymakers signed away sovereignty without question.
Take-or-pay contracts were accepted, sovereign guarantees were surrendered, and arbitration clauses were shipped to London. They called it reform, they called it modernisation, they called it progress. In reality, they signed chains around the state. Three decades later, those chains weigh heavier than ever, with nearly every year billions flowing to Independent Power Producers (IPPs), feeding the monster of circular debt. What was meant to illuminate Pakistan has instead cast a shadow across generations.
The tragedy is not only in the past, but also in the power policies of 1994 and 2002. In 2015, at the very moment when lessons from India and Bangladesh were available to any serious policymaker, Pakistan doubled down on failure. India had already shifted towards domestic arbitration under its 1996 Arbitration Act. Bangladesh, through its 2001 Arbitration Act, had localised disputes in Dhaka. Both neighbours reformed, adapted, and learnt. Pakistan did not.
Under the 2015 Power Policy, it signed a new wave of power purchase agreements (PPAs), once again unaltered from the World Bank’s 1990s template. Arbitration remained seated in London, capacity payments remained absolute, and the burden on citizens remained unbearable. No clause was changed, no comma was shifted, no protection was written for Pakistan. It was as if those in power had forgotten the disasters of the 1990s or, worse, had chosen to repeat them.
At the heart of this betrayal are names and offices that history must record. From 2013 to 2018, the Minister of Planning, the Minister of Petroleum, and the Prime Minister lectured Pakistanis every night on television about economic growth, foreign investment, and the promise of energy.
Yet behind those words were contracts that mortgaged the nation’s future. They presented themselves as reformers, but they signed agreements that guaranteed dependency. Their speeches were filled with numbers of megawatts, but their signatures created mountains of debt.
At the same time, the Managing Director of the Private Power and Infrastructure Board, a man who has clung to that office for decades, continued to preside over the institutional capture of Pakistan’s energy policy. Instead of reforming, he blocked it. Instead of following India or Bangladesh, he entrenched Pakistan in the World Bank’s straitjacket. Their collective negligence was not only incompetence—it was complicity.
Numbers tell this story more truthfully than words: Rs. 1300 billion in annual payouts to IPPs, Rs. 2.6 trillion in accumulated circular debt, and Rs. 1.225 trillion borrowed in a single day to keep the system from collapsing
The tragedy grows bitterer when we recall the slogans of salvation. Foreign-qualified champions of liquefied natural gas (LNG) and coal-fired projects arrived, promising that imported fuels would change the fate of Pakistan.
They stood on stages and spoke of prosperity, of self-sufficiency, of a Pakistan transformed. In reality, they built debt traps. Their LNG and coal plants were bound to the same arbitration clauses, the same rigid take-or-pay terms, the same foreign-seated dispute forums. They did not read the PPAs, or if they did, they did not care. They did not alter a single foundation, a single line, a single comma. They presented contracts as victories when in truth they were defeats. Today, the cost is measured not in speeches but in billions, in darkness, and in shame.
On 24 September 2025, the betrayal was written again in black and white. The government signed loan facilities worth Rs 1.225 trillion with 18 banks to settle the outstanding dues of IPPs locked in circular debt. This staggering amount will not be paid by those who signed the contracts. It will not be paid by the ministers who smiled on television, nor by the officials who blocked reform. It will be paid by ordinary Pakistanis, through an Rs 3.23 per unit surcharge on their electricity bills for the next six years. The poor will pay it, the middle class will pay it, and even the unborn will pay it. It is a punishment without trial, a sentence passed not by law but by negligence.
Numbers tell this story more truthfully than words: Rs. 1300 billion in annual payouts to IPPs, Rs. 2.6 trillion in accumulated circular debt, and Rs. 1.225 trillion borrowed in a single day to keep the system from collapsing. These are not just numbers; they are wounds. They bleed into every home when the electricity bill arrives. They bleed into every school left without funding, every hospital without medicine, and every road left broken. They are the price of contracts that were signed not with care but with carelessness, not with foresight but with negligence. They reveal how Pakistan’s sovereignty was auctioned clause by clause, until nothing was left but dependency.
Pakistan is not destroyed from outside, but from within; its energy contracts are not just agreements; they are epitaphs of sovereignty
Thereafter, the painful truth emerges: Pakistan’s greatest enemies are not India or Israel. Both are named as foes; both are treated as existential threats. Yet neither has inflicted upon Pakistan the damage done by its own leaders. India did not force Pakistan to sign LCIA arbitration clauses; Pakistan’s ministers did. Israel did not draft take-or-pay contracts; Pakistan’s officials accepted them.
Neither India nor Israel ordered Pakistan to borrow Rs. 1.225 trillion in 2025 and pass the burden to its people; it was Pakistan’s own policymakers who did this. Those who held office between 2013 and 2018, who controlled planning, petroleum, and government itself, inflicted wounds far deeper than any enemy abroad. They did so with pens, with signatures, with negligence. Their negligence has bled Pakistan more than war ever could. What a great tragedy when very recent PPAs were renegotiated by a so-called backlist financial guru, but failed to adopt UNCITRAL standards, to renegotiate contracts, and to reclaim the jurisdiction it had abandoned. Nevertheless, the will has never matched the need. Because he is a guru of his own class.
The bitterest irony of all is that Pakistan, a nuclear power, stands reduced to a begging bowl. A nation that can build missiles and test warheads is unable to write contracts that protect its people. A state that boasts of deterrence is defenceless against the clauses in its own agreements. Nuclear power has become nothing more than a hollow shell, for the true sovereignty of the nation lies not in weapons but in law, not in arsenals but in contracts. By failing to reform, by refusing to learn, by clinging to the World Bank’s template, those who ruled Pakistan turned strength into weakness, power into poverty, pride into humiliation.
The law still offers a path forward, but it will require courage of the kind that has been absent for decades. Pakistan must reform its arbitration framework, renegotiate its PPAs, strengthen its judiciary, and reclaim the sovereignty it abandoned. However, to do so, it must first name the culprits. The Prime Minister, the Minister of Planning, the Minister of Petroleum, and the MD of PPIB, who ruled between 2013 and 2018, must be remembered not as visionaries but as the architects of betrayal. They must be held to account in history’s judgement, even if not in a court of law. For their negligence has condemned Pakistan to years of debt, years of surcharges, years of humiliation.
What remains is sorrow. Pakistan’s energy sector is not simply mismanaged; it has been destroyed by its own guardians. Betrayed by the foreign-qualified champions who sold illusions. Betrayed by the ministers who promised growth but signed debt! Betrayed by the officials who clung to office and buried reform. Betrayed by the very leaders who should have defended sovereignty, but instead surrendered it. It is a betrayal greater than the harm of India or Israel, because it was done not by enemies but by those who claimed to love the nation.
Pakistan, a nuclear power, sits with a begging bowl. It begs for loans to pay contracts it never should have signed. It begs for time to service debts it cannot escape. It begs for light while it drowns in darkness. The people beg for relief while their leaders lecture them on television. This is the mournful truth: Pakistan is not destroyed from outside, but from within; its energy contracts are not just agreements; they are epitaphs of sovereignty. They are the gravestones of a nation betrayed, written in the language of law but carved with the tears of its people.