The Ministry of Finance has come up with a plan to release Rs. 1,250 billion to pay off the energy sector’s circular debt, under directions from the International Monetary Fund (IMF), sources told ProPakistani.
Finance Ministry sources confirmed that the decision, aimed at reducing the circular debt burden of the sector, comes following extensive discussions and negotiations with the IMF.
The Ministry of Finance has briefed the IMF on the proposed strategy, seeking approval for the release of funds under the lender’s stringent conditions.
Of the total amount, Rs. 1 trillion is earmarked for the petroleum sector, while the power sector is set to get Rs. 250 billion. Sources said that these funds will be disbursed per the specific needs of each sector.
Caretaker Prime Minister Anwaar ul Haq Kakar, received a comprehensive briefing on the plan and subsequently issued instructions for seeking approval from the IMF.
Under the plan, the Oil and Gas Development Company Limited (OGDCL) is set to receive Rs. 600 billion, while Pakistan Petroleum Limited (PPL) and Gas and Oil Holdings Private Limited (GHPL) will be granted Rs. 150 billion and Rs. 170 billion, respectively. An additional Rs. 100 billion will be released to the National Power Parks Management Company Limited.
The settlement is expected to yield Rs. 800 billion in the form of dividends and taxes. Importantly, sources assured that the cash release for the circular debt settlement would not increase the fiscal deficit.
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