KARACHI: Pakistan has announced the resolution of Rs1.225 trillion ($4.29 billion) in power sector circular debt, said an official statement on Thursday, a move officials described as a landmark step to restore stability in the country’s troubled energy market.
Federal Power Minister Sardar Awais Ahmed Khan Leghari, addressing a ceremony televised nationally, said the agreement was aimed at breaking the debt cycle that has long weighed on the sector.
“The circular debt has long burdened Pakistan’s energy sector,” he said. “Today, this circular debt scheme is a bold step to break that cycle, restore stability and provide relief to our consumers.”
He added that the restructuring was part of a broader reform plan rather than an isolated measure.
“Previously, only the financial cost of the debt was being serviced, a stopgap that never addressed the real issue,” he added. “Now, a burden of Rs1,225 billion in circular debt is going to be settled without falling on the exchequer or on consumers. This will strengthen the liquidity of the sector.”
