Govt Resolves Rs. 1.23 Trillion Power Debt With No Extra Burden on Consumers

The Government of Pakistan has announced a breakthrough in the country’s energy sector, successfully resolving Rs. 1,225 billion in circular debt through a landmark restructuring deal that places no additional burden on electricity consumers. According to a press release issued by the Ministry of Finance, the historic agreement was achieved through a coordinated effort led by the Prime Minister’s Task Force on Power, in partnership with the Ministry of Energy, the State Bank of Pakistan, the Pakistan Banks Association, and 18 partner banks. The restructuring includes Rs. 660 billion in existing loans and Rs. 565 billion in fresh financing to clear overdue payments to power producers. Crucially, officials emphasized that the debt resolution will not result in any new charges for consumers. Repayments will be made using the already levied surcharge of Rs. 3.23 per unit, ensuring that the public is not asked to shoulder any additional costs as a result of the deal. The agreement also unlocks Rs 660 billion in sovereign guarantees, which will free up liquidity for key sectors such as agriculture, small and medium enterprises, housing, education, and healthcare. This move is expected to boost economic activity and support growth in areas critical to Pakistan’s development. Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, hailed the achievement as a decisive step toward restoring fiscal discipline, investor confidence, and long-term sustainability in the energy sector. He credited the success to collective leadership, technical expertise, and strong collaboration between public and private institutions. The government’s ability to resolve the circular debt without imposing new costs on consumers, while simultaneously channeling resources into priority sectors, has been described as a model for tackling Pakistan’s structural challenges with innovation and unity. The Ministry of Finance reaffirmed its commitment to balancing financial stability with much-needed energy sector reforms, signaling a new era of responsible governance and economic resilience.