Pakistan gives assurance to IMF on power sector’s circular debt

ISLAMABAD: The Pakistani government has given assurance to the International Monetary Fund (IMF) on maintaining the power sector’s circular debt at Rs2.31 trillion, ARY News reported on Friday.

The Power Division presented the details before the Senate Standing Committee for Power today. The caretaker federal government assured the IMF to maintain the circular debt of the power sector.

The session of the Senate Standing Committee for Power was held under the chair of Senator Azam Nazeer Tarar today.

In a briefing, the Power Division officials said that the circular debt stood at Rs2.31 trillion by June 2023 which will be maintained.

Read: Power division recovers Rs55 billion from pilfers

They said that the Fund has been given an assurance by the federal government in this regard. The provinces were defaulters of Rs113 billion in terms of power.

The authorities have so far recovered more than Rs52 billion during the anti-power theft drive across the country. The net metering consumers have reached 1,200 Megawatts, they added.

A briefing was also given by the National Transmission & Despatch Company (NTDC) officials to the Senate body. They said that the authorities were focused on promoting solar energy projects to shift from expensive fuel for power production.

The NTDC officials said that a 10-year power production plan has been prepared. Under the new plan, the authorities will establish low-cost fuelled power projects.

Chairman Azam Nazeer Tarar said that the government is required to improve the energy basket.

Related: Pakistan to cut down development funds on IMF demand

He pointed out that electricity production cost was higher in Pakistan as compared to other regional countries which was creating hurdles in achieving development goals.

Circular debt soars to Rs 2.6tr

The circular debt of Pakistan’s power sector has soared to Rs 2611 billion till October 2023.

As per details, the hike in circular debt continued despite the massive increase in power tariffs.

The circular debt increased by Rs 74 billion in the month of October, whereas the power sector circular debt hiked by Rs 301 from July to October.