100 factories in Faisalabad close over high electricity costs

LAHORE: The Patron General of the Federation of Chambers of Commerce and Industry, SM Tanveer, disclosed that over 100 factories in Faisalabad were forced to shut down due to the high costs of electricity on Monday.

Speaking at a press conference in Lahore, Tanveer expressed “deep concern” over the financial strain that high energy prices are placing on manufacturing operations.

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Tanveer said there was an urgent need to revise contracts with independent power producers (IPPs) to address the unsustainable electricity rates.

He warned that without such reforms, Pakistan could face severe economic consequences, including the potential loss of export orders worth $5 billion. This would have significant repercussions for sectors critical to the country’s economic health and global trade position.

The Federation of Chambers of Commerce and Industry has reportedly been lobbying actively for a review of energy policies, advocating for lower electricity costs to support the manufacturing sector. Tanveer pointed out that the high cost of energy is exacerbated by the country’s economic challenges, including an inflation rate of 11 per cent.

The patron general criticised the central bank’s decision to maintain an interest rate of 19.5 per cent, describing it as detrimental to business operations.

“The current interest rate is unjustifiable when compared to the inflation rate. Factories cannot sustain operations under such high borrowing costs and expensive electricity,” Tanveer said.

He stated that the combination of high interest rates and steep energy costs was placing a severe burden on businesses, making it increasingly difficult for them to remain competitive.

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Tanveer also called for immediate policy reforms to address these issues. He urged both, government officials and energy producers to engage with industry stakeholders to develop solutions that would ease the financial pressures on factories.