Islamabad (News Desk) — In a landmark achievement, the Government of Pakistan has successfully resolved Rs. 1,225 billion in power sector circular debt — a chronic challenge plaguing the country’s energy and fiscal landscape for years. The restructuring, hailed as a historic breakthrough, was finalized through a coordinated effort by the Prime Minister’s Task Force on Power, the Ministry of Energy, the Ministry of Finance, the State Bank of Pakistan (SBP), Pakistan Banks Association (PBA), and 18 commercial banks.
The restructuring includes Rs. 660 billion in restructured existing loans and Rs. 565 billion in fresh financing to clear overdue payments to power producers. Importantly, this resolution does not place any new financial burden on electricity consumers, as repayments will be serviced through an already imposed surcharge of Rs. 3.23 per unit.
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A key outcome of the restructuring is the release of Rs. 660 billion in sovereign guarantees, unlocking significant liquidity that will now be redirected towards critical sectors such as agriculture, SMEs, housing, education, and healthcare.
Finance Minister Senator Muhammad Aurangzeb called the achievement a “decisive step towards restoring fiscal discipline, investor confidence, and energy sector sustainability.” He emphasized that the success is a testament to inter-institutional coordination and public-private collaboration.
“This milestone shows that Pakistan can address structural economic issues through unity, innovation, and resolve,” said the Finance Minister. “It also proves the government’s commitment to achieving energy reforms while maintaining financial stability.”
The task force, chaired by Federal Minister for Power Sardar Awais Ahmad Khan Leghari, was instrumental in pushing forward this initiative. Strong backing also came from Advisor to PM on Privatisation Muhammad Ali (former SAPM on Power), National Coordinator Lt. General (R) Muhammad Zafar Iqbal, SBP Governor Jameel Ahmed, and Finance Secretary Imdadullah Bosal.
This comprehensive debt workout is expected to set a precedent for resolving other deep-rooted financial challenges in Pakistan’s economy, while bolstering investor confidence and strengthening the country’s macroeconomic outlook.
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