NA receives plan to finish Rs2,429bn circular debt

ISLAMABAD: The Power Division shared its plan to finish circular debt amounting to Rs2,429 billion with the National Assembly on Friday, stating that circular debt was being managed under Circular Debt Management Plan and efforts were being made by the Task Force, Ministry of Energy (Power Division) and Ministry of Finance to curtail circular debt.

In a written reply to a question of Mirza Ikhtiar Baig, Minister for Power Division Sardar Awais Khan Leghari stated that a further amount of Rs1.2 trillion was being arranged to finance/refinance the current stock of circular debt.

He stated that the tenure of this loan will be of six years with the interest rate at KIBOR minus 0.9% and the same will be paid through the debt service surcharge collected from the electricity consumers.

He clarified that the impact of savings from negotiations with IPPs was spread on the remaining term of the respective contracts. “Therefore, benefits to the consumers will be passed on the remaining term,” the minister stated.

He stated that the benefit of negotiations was being mainly passed on to the consumers, however, some portion will be used to reduce circular debt.