Pakistan sets six-year target to eliminate Rs22.4tr power sector debt
Islamabad: Pakistan has taken a decisive step toward power sector stability with the signing of a Rs1,225 billion circular debt reduction scheme, aimed at gradually eliminating the country’s Rs22.4 trillion debt burden.
Federal Minister for Energy, Sardar Awais Ahmed Khan Leghari, said that at the start of the present government, the circular debt had reached Rs22.4 trillion. So far, about Rs800 billion has already been reduced, and with the new financing arrangement, another Rs1,225 billion will be retired. The government has set a target of bringing the circular debt to zero within six years.
For years, consumers paid a debt service surcharge of more than Rs3.25 per unit, which was used only for interest payments, leaving the principal untouched. Under the new mechanism, the surcharge will now cover both interest and repayment of the principal, ensuring sustainable debt reduction.
Leghari emphasized that this achievement is the result of Prime Minister Shehbaz Sharif’s vision and guidance, coupled with joint efforts of all relevant institutions, which are now turning the long-standing goal of eliminating circular debt into reality.
