Circular debt climbs by Rs79bn in Q1FY26, hits Rs1.69tr

ISLAMABAD: Pakistan’s circular debt in the power sector climbed by Rs79 billion during the first quarter (July-September) of fiscal year 2025-26, reaching Rs1.693 trillion by the end of September, according to a report issued by the Power Division.

The debt stock, which stood at Rs1.614 trillion at the close of FY2024-25 in June, saw a renewed uptick in the first three months of the new fiscal year — a development that reignited concerns about inefficiencies and financial losses in the energy supply chain. Energy experts said the buildup reflected lingering power theft, weak recoveries and structural flaws within state-run distribution companies (Discos).

Receivables from K-Electric alone stood at Rs229 billion by September 2025, including Rs42 billion in principal and Rs187 billion in markup. The growing receivables and debt pile-up have once again put pressure on the government to accelerate reforms and plug financial leakages that continue to burden the national exchequer.