Prime Minister Shehbaz Sharif announced that the Government is introducing a trillion-rupee energy debt breakthrough, calling it a “historic reform” to stabilise Pakistan’s power sector. He said the new plan marks the country’s first structured attempt to permanently resolve the circular debt crisis.
The government, in collaboration with a consortium of 18 banks, launched a Rs. 1.225 trillion financing facility at KIBOR minus 0.9%. With a six-year repayment schedule, the plan aims to clear circular debt in under six years while saving consumers Rs. 350 billion by cutting late payment surcharges. Out of the total package, Rs. 659 billion will retire Power Holding Limited loans, while the remaining funds will go to Independent Power Producers (IPPs) and Government Power Producers (GPPs).
Speaking via video link from New York, PM Shehbaz praised the task force, financial institutions, and ministries for finalising the deal. He credited former caretaker energy minister Mohammad Ali and Task Force head Lieutenant General (R) Zafar Iqbal for their negotiations with IPPs. He also recognised the support of the State Bank, FBR, and commercial banks, including the Bank of Punjab, Meezan Bank, and Habib Bank.
The premier stressed that Army Chief Field Marshal Syed Asim Munir’s backing strengthened the reform drive. He further noted that the IMF had acknowledged Pakistan’s progress, with its managing director praising the speed of reform implementation.
Officials clarified that this initiative is only the beginning. Upcoming reforms will focus on privatising distribution companies (DISCOs) and cutting line losses to build long-term sustainability. “This is Team Pakistan’s success,” PM Shehbaz said, urging stakeholders to move forward with confidence and determination to stabilise the energy sector.
Related stories:
