Pakistan Completes Record Rs. 659.6 Billion Settlement of Power Sector Debts

Pakistan has completed a historic Rs. 659.6 billion settlement of Power Holding Limited (PHL) debts, marking the largest-ever transaction in the country’s debt capital markets, Federal Minister for Power Sardar Awais Ahmed Khan Leghari announced on Wednesday. The settlement includes the redemption of Rs. 399.6 billion in Pakistan Energy Sukuk (PES) I and II bonds through the National Depository Mechanism (NDM) via off-market transactions, as well as the clearance of Rs. 259.7 billion across various syndicated financing facilities. According to the minister, the NDM component of the transaction demonstrates the maturity and strength of Pakistan’s capital market ecosystem and its capacity to manage large-scale strategic financial operations. “This landmark transaction is a core component of the Rs. 1,225 billion Circular Debt Reduction Plan,” Leghari stated. “It reflects strong institutional confidence in Pakistan’s ongoing economic reforms, government initiatives, and the depth of our capital and Islamic finance sectors.” According to experts, this settlement provides a significant boost to the energy sector, which has long struggled with high circular debt, liquidity constraints, and operational inefficiencies. The minister emphasized the government’s commitment to structural reforms in the energy sector alongside long-term fiscal stabilization. He highlighted ongoing efforts to engage with all stakeholders to accelerate reform-driven growth and secure Pakistan’s energy future. Financial analysts view the Rs. 659.6 billion transaction as a milestone, signaling that Pakistan’s capital markets are capable of supporting large-scale debt operations, a crucial factor in maintaining energy sector liquidity and stability.