Govt is set to reduce circular debt from the shocking RS2.3TR to RS561BN as agreed with the IMF

• Govt to disburse payments to current or next week.
• Rs1.275 trillion loan to settle PhL and IPP charges.
• Consumers to repay the energy loan over six years.

In an important financial step aimed at revitalizing Pakistan’s problematic sector, the government is expected to reduce the circular debt of the energy sector from an amazing RS2,381 trillion to approximately RS561 billion, making payments of RS1,275 billion.

“We are going to disburse the current or next week the amount of Rs1,275 billion to limit the threat of circular debt in the electricity sector to about 561 billion Rs The news.

“The borrowed loan of RS1,275 billion from commercial banks will be used by the central electricity market (CPPA-G) to pay all PHL loans (RS683 billions) and to liquidate the rest of the stocks of the delayed interest.

The Central Electricity Market Organization (CPPA-G) will eliminate payments and thus transfer the circular debt to RS561 billion that will later be downloaded to the official website of the Power Department.

“Credit for reducing circular debt is largely going to the energy group for the energy sector that includes PM Muhammad Ali consultants, Zafar IQBal General and Official Experts from the SECP, CPPA-G and Nepra, which through IPPS negotiations have been cleared.

The working group, however, in a big deal, has already managed to get the late IPP pay interests (LPIS) amounting to RS387 billion resigned. The amount of RS254 billions has been cleared through an additional budget subsidy for clearance of circular debt.

However, the 224 billion billions of the head of non -interests and RS337 billions of liabilities mean that the 561 billion Rs will remain as a circular debt. This reserve will be treated through the reforms and effectiveness of the discs.

Electricity consumers will be withdrawn from the RS1,275 billion loan through the surcharge of RS3.23 per unit that has already entered into force and electricity consumers are already paying through electricity bills, so there will be no new consumer burden. However, consumers under the last scenario will continue to pay it for the next 6 years to unload the RS1.275 billion loan. He said that the increase in Rs3.23 per unit is not the new one, as it is already in force, but now it will last for 6 years to pay the loan.

In a question, he said that the increase in Rs3.23 per unit has already reached a 10 % ceiling and the government does not intend to increase its ceiling.

However, regarding the insistence of the IMF, the 10% ceiling has been removed as it was a building point.