ISLAMABAD: The Ministry of Finance has addressed the successful settlement of Rs1,225 billion in power sector circular debt, calling it a historic breakthrough.
The achievement was made possible through the combined efforts of the Prime Minister’s Task Force on Power, the Ministry of Energy, the State Bank of Pakistan, the Pakistan Banks Association (PBA), and 18 partner banks. Officials described it as a milestone in tackling one of the country’s most persistent energy challenges.
The initiative was led by Minister for Power Sardar Awais Ahmad Khan Leghari, with strong backing from Finance Minister Senator Muhammad Aurangzeb, Advisor to the PM on Privatisation Muhammad Ali, National Coordinator Lt. General Muhammad Zafar Iqbal, SBP Governor Jameel Ahmed, Secretary Finance Imdadullah Bosal, members of the Task Force, as well as PBA and the partner banks.
The restructuring involved Rs660 billion in existing loans and Rs565 billion in fresh financing, which will be used to clear overdue payments to power producers.
Repayments will not add any new burden on consumers, as they will be managed through the already applied surcharge of Rs3.23 per unit.
This agreement also releases Rs660 billion in sovereign guarantees, making liquidity available for key sectors such as agriculture, small businesses, housing, education, and healthcare.
Finance Minister Aurangzeb said the resolution is a decisive step toward restoring fiscal discipline, boosting investor confidence, and ensuring long-term sustainability in the energy sector.