The power sector’s circular debt decreased from PKR 2,393 billion in FY 2023–24 to PKR 1,614 billion in FY 2024–25.
In the federal budget for FY 2025–26, a total of PKR 893 billion was allocated for the power sector; however, a deduction of PKR 98 billion was subsequently made. Had the power sector received the full allocated budgetary payment, the circular debt would have further reduced to PKR 1,577 billion. Due to the budget deduction of PKR 98 billion, the circular debt witnessed an increase of PKR 61 billion during this fiscal year.
The losses of Power Distribution Companies (DISCOs), which stood at PKR 591 billion in FY 2023–24, dropped by PKR 193 billion to PKR 397 billion in FY 2024–25. During the current fiscal year, the Power Division has further reduced these losses from PKR 397 billion to PKR 326 billion. Over a two-year period, the Power Division has successfully curtailed overall losses by PKR 265 billion—bringing them down from PKR 591 billion to PKR 326 billion.
This reduction clearly demonstrates that the reforms implemented in the power sector are proving effective and yielding sustained positive outcomes.
The aforementioned figures confirm that the reform process within the energy sector is progressing effectively. The budget deduction was merely a temporary financial factor rather than a reflection of any operational decline. The Power Division remains committed to executing its reform agenda to ensure the energy sector becomes financially sustainable and reliable for consumers.
