The International Monetary Fund (IMF) has made the approval of the next $1.2 billion tranche for Pakistan conditional on additional requirements, which the government has reportedly agreed in principle to implement.

According to sources, the IMF has imposed 11 new conditions, bringing the total number of conditions under the $7 billion bailout package to 75.

Officials say the new requirements include significant amendments to the Public Procurement Regulatory Authority (PPRA) rules, aimed at ending the long-standing practice of awarding billions of rupees in government contracts without competitive bidding.

These legal and regulatory changes are expected to be completed by September 2026.

Energy sector reforms are also a key part of the programme under which gas prices will be adjusted every six months starting July 2026, while electricity tariffs will be revised annually beginning in January 2027.

According to sources, an increase in electricity and gas prices has been declared inevitable in the fiscal year 2026-27.

In addition, under new structural benchmarks, the government has agreed to amend laws related to Special Economic Zones and Special Technology Zones, with plans to gradually phase out financial incentives provided to these zones.

The sources said that a centralised system for selecting audit cases will be introduced in the FBR, while amendments will also be made to the NAB Ordinance.

Under the Finance Bill 2026, profit-based facilities will be replaced by a cost-based system, while a target has been set to completely eliminate all financial incentives by 2035.

Similarly, it has been decided to end the incentives provided under the China-Pakistan Economic Corridor (CPEC) by 2035.

The sources said that these measures are part of the IMF-backed reform agenda, and their implementation has been made a prerequisite for the release of the next tranche.