ISLAMABAD: Electricity consumers in Pakistan will continue paying a Rs3.23 per unit debt service surcharge (DSS) for the next six years to help repay a massive Rs1.275 trillion loan secured by the Central Power Purchase Agency (CPPA) from 18 commercial banks. This surcharge is already being collected through monthly bills, so consumers won’t face any additional immediate burden.
The loan is part of a long-term strategy to resolve the *power sector’s circular debt, which currently stands at **Rs2.381 trillion. The government aims to reduce this burden by Rs1.275 trillion through the loan, with the rest to be addressed via **lower interest rates, **renegotiated IPP contracts, and **termination of six IPPs, ultimately targeting a reduction to *Rs300 billion.
A Power Division official confirmed that the cap on the surcharge has been removed under IMF pressure, although the current rate of Rs3.23/unit will remain unchanged for now. Of the total Rs1.275 trillion, Rs617 billion is a fresh loan at a 10.5–11% interest rate, with repayments embedded in consumer bills.
The IMF has allowed banks to extend this credit directly to CPPA without government guarantees, reflecting confidence in the updated payment mechanism.
Story by Khalid Mustafa
