Pakistan’s power sector circular debt has been reduced by Rs 780 billion in the fiscal year 2024-25, bringing the total debt load down to approximately Rs 1.614 trillion. This reduction is attributed to improved distribution company performance, decreased line losses, enhanced revenue recovery, and renegotiated IPP contracts.
Additionally, the government has secured Rs 1.275 trillion in bank financing to further eliminate arrears—without imposing extra surcharges on consumers. Though progress is acknowledged, stakeholders warn that reliance on borrowing may impact long-term sustainability without structural reforms.
circular debt reduction, power sector reform, tariff adjustment ahead
