The government’s Rs1.225 trillion circular debt resolution plan will place no additional burden on power consumers, as repayments are set to be serviced through the already levied surcharge of Rs3.23 per unit, the Ministry of Finance said on Thursday.
In a statement, the ministry said it welcomes the successful resolution of Rs1,225 billion power sector circular debt, which was achieved through a joint effort led by the Prime Minister’s Task Force on Power in coordination with the Ministry of Energy, the State Bank of Pakistan (SBP), the Pakistan Banks Association, and 18 partner banks.
“This landmark restructuring represents a breakthrough in addressing one of the most chronic challenges of Pakistan’s energy sector,” the finance ministry said.
It shared that the effort was led by the PM’s Task Force, chaired by the Minister of Power, Sardar Awais Ahmad Khan Leghari, supported by Minister of Finance Muhammad Aurangzeb, Advisor to the PM on Privatisation, Muhammad Ali and all the dedicated members of the Task Force.
The agreement includes the restructuring of Rs660 billion in existing loans and Rs565 billion in fresh financing to clear overdue payments to power producers.
“Importantly, this debt workout introduces no new burden on consumers, as repayments will be serviced through the already levied surcharge of Rs3.23 per unit,” the ministry said.
Moreover, the structure also unlocks Rs660 billion in sovereign guarantees, channelling liquidity toward agriculture, SMEs, housing, education, and healthcare.
Commenting on this achievement, Aurangzeb underscored that the resolution marks a decisive step toward restoring fiscal discipline, investor confidence, and energy sector sustainability.
Highlighting the broader significance of the achievement, the finance minister said that the success sets a precedent for addressing Pakistan’s structural challenges with innovation, unity, and resolve.
He further emphasised that this accomplishment signals the government’s unwavering commitment to resolving long-standing energy bottlenecks and the government’s ability to balance financial stability with energy sector reforms.
Importantly, the release of Rs660 billion in sovereign guarantees through this arrangement will channel much-needed liquidity into priority sectors such as agriculture, SMEs, housing, education, and healthcare, he said.
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