# DISCO Losses, KE Receivables Add Rs520bn to Circular Debt
**ISLAMABAD:** Losses and inefficiencies of former Wapda power distribution companies (DISCOs), lower recoveries and outstanding receivables from K-Electric contributed around **Rs520 billion** to the flow of power sector circular debt during fiscal year 2025-26, official sources said.
According to official data, DISCO losses declined marginally by Rs3 billion to **Rs262 billion** in FY2025-26, compared with Rs265 billion in the previous fiscal year. Meanwhile, K-Electric’s outstanding receivables increased by **Rs194 billion**, reaching Rs421 billion.
DISCO under-recoveries, however, showed significant improvement, falling by more than 50% to **Rs64 billion** from Rs132 billion in FY2024-25.
Interest charges payable to independent power producers (IPPs), Power Holding Limited (PHL) and circular debt financing also declined substantially to **Rs14 billion**, compared with Rs58 billion a year earlier. Other adjustments added another Rs75 billion to the circular debt.
Overall, the power sector circular debt flow stood at **Rs609 billion** during FY2025-26. This was partially offset by adjustments of Rs247 billion, including Rs98 billion in unclaimed subsidies, Rs129 billion through repayment of loan principal and Rs20 billion in pending generation costs.
After these adjustments, the circular debt flow was reduced to **Rs364 billion**. A further Rs302 billion in subsidy payments brought the net addition down to Rs61 billion.
As of June 30, 2026, the circular debt stock stood at **Rs1.675 trillion**, up Rs61 billion from Rs1.614 trillion recorded a year earlier.
The outstanding amount included **Rs784 billion payable to power producers**, Rs90 billion in GENCOs’ payables to fuel suppliers and Rs801 billion in circular debt financing.
Officials said the Rs61 billion increase during FY2025-26 was primarily driven by DISCO losses and inefficiencies of Rs262 billion and **Rs194 billion in non-payment by K-Electric**.
K-Electric’s total receivables stood at **Rs421 billion** as of June 2026, comprising Rs197 billion in principal and Rs224 billion in markup.
Other contributors to the circular debt included DISCO under-recoveries of Rs64 billion, interest charges of Rs14 billion and other adjustments amounting to Rs75 billion.
Story by Fawad Yousafzai
