Circular debt down by Rs116 bn after ECC approves IPPs adjustments: Hammad Azhar

ISLAMABAD: Federal Minister for Power Hammad Azhar on Friday announced that the Economic Coordination Committee (ECC) has approved a financial mechanism for government-owned IPPs, paving the way to bring down the circular debt by Rs116 billion, ARY NEWS reported.

Taking to Twitter to make the announcement, Hammad Azhar said that the ECC has today approved the financial setoff mechanism for government-owned IPPs.

ECC has today approved the financial setoff mechanism for government owned IPPs. This means that the receivables and payables between government entities have been balanced against each other. This will lead to a reduction of Rs 116 BN in the circular debt stock.

— Hammad Azhar (@Hammad_Azhar) July 16, 2021

“This means that the receivables and payables between government entities have been balanced against each other,” he said adding that it would lead to a reduction of Rs 116 billion in the circular debt stock.

According to sources privy to details of the ECC meeting headed by Finance Minister Shaukat Tarin, the committee approved adjustments of payables against the Atomic Energy Commission and Neelam Jhelum hydropower project.

“The meeting also approved adjustments in payables and receivables of WAPDA and NTDC,” they said while confirming that it would bring down the debt cycle by Rs116 billion.

On May 25, Planning and Development Minister Asad Umar said that circular debt recorded a reduction of Rs189 billion during July-April FY 2021.

Taking to Twitter, he said circular debt build-up during July-April this fiscal year was Rs260 billion as compared to Rs449 billion during the same period last year, showing a reduction of 189 billion.

He said the full-year circular debt build-up is expected to be more than Rs100 billion and less than the debt accumulation in the previous PML-N government’s last year in power