Circular debt reaches Rs2.655tr in 11 months of FY24

ISLAMABAD: The circular debt in the power sector in the first 11 months of FY24 stood at Rs2.655 trillion against Rs2.646 trillion gathered in the same period of FY23 showing increase of Rs9 billion growth in the buildup. However, in FY23 the circular debt was at Rs2.310 trillion.

Under the IMF covenants, the government has to scale down the circular debt of Rs2.655 trillion to Rs2.310 trillion by June 30, 2024 and the Power Division has yet to upload the circular data of the whole FY24 ending June 30 in its official website. The circular debt surged to Rs2.655 trillion during July-May 2023-24 mainly because of payables of Rs1.780 trillion to power producers and Gencos’ payables amounting to Rs110 billion to fuel suppliers and loans of power sector of Rs765 billion parked in power holding company (PHP). Till April, 2024, the circular debt climbed to Rs2.729 trillion which plummeted to Rs 2.655 trillion in May 2024.

The Discos’ losses have swelled to Rs230 billion despite the campaign against theft of electricity and more importantly system faced the recovery losses of Rs279 billion during the 11 months of FY24 with prior adjustments amounting to Rs155 billion.

The Power Division after the lapse of 7 months on August 30 uploaded the circular debt report of February, March, April and May, 2024 in one go. However, the circular debt report for the month of June will be uploaded after the approval of Federal Minister Awais Leghari. The Power Division official said that the circular debt in the whole FY24 would be brought down to Rs2.3 trillion after paying the outstanding dues to IPPs as per the IMF condition.