Power sector circular debt increases by 3.09% to Rs2.467tr in first quarter

ISLAMABAD: The circular debt in the power sector has swooped upward to Rs2.467 trillion with an increase of Rs74 billion in the first quarter of the current financial year, from Rs2.393 trillion registered on June 30, 2024.

During the July-September period of FY25, the circular debt has swelled by 3.09 percent to Rs2.467 trillion, comprising payables to power houses at Rs1,688 billion, GENCOs’ payables to fuel suppliers at Rs96 billion and loans of Rs683 billion parked in PHL (Power Holding Company Limited). However, in the same period of FY24, the circular debt was at Rs2.537 trillion.

The summary of the circular debt on a three-month basis, instead of the monthly basis that has been sent to CCOE (Cabinet Committee on Energy) for intimation and approval, reveals that the Discos inefficiency losses have amounted to Rs113 billion while their recovery losses have increased to Rs126 billion. The prior years’ recovery adjustments have also increased to Rs269 billion against Rs198 billion on June 30, 2024. However, the prior years’ recovery losses were at Rs244 billion in the first three months of FY24. The stock payments in three months of FY25 stood at Rs4 billion. The budgeted subsidy of Rs71 billion that was earmarked for the period under review, has not been released to the Power Division. The interest payments on loans parked in PHL and payments to IPPs stood at Rs48 billion in the first quarter. The pending generation cost of Rs13 under the heads of quarterly tariff adjustments and fuel cost adjustments is yet to be recovered and has now become a part of the circular debt. The data shows that K-Electric is also required to pay Rs1 billion to the Power Division.