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September 21, 2019

Energy reforms restrain circular debt’s growth to Rs18bln/month

Business

September 21, 2019

ISLAMABAD: The government’s steps to control line losses and improve recovery has curtailed growth in circular debt to Rs18 billion per month from monthly Rs38 billion, a minister said on Friday.

Minister for Power Omar Ayub Khan said circular debt has shown considerable reduction in its growth due to concerted efforts of the power division’s team.

“It was growing with volume of Rs38 billion per month and in 8 month its growth at the end of the last financial year was reduced to Rs26 billion per month,” Khan said, talking to an International Monetary Fund’s (IMF) mission. “In July 2019, the results are even encouraging as the growth is further arrested to Rs18 billion per month.”

An IMF mission, led by its chief for Pakistan Ernesto Ramirez Rigo, visited Islamabad and Karachi during September 16–20, 2019 to take stock of economic developments since the start of the $6 billion extended fund facility program in July and discuss progress in the implementation of economic policies. Secretary Power Division Irfan Ali and other senior officials were also present during the meeting, an official statement said.

Power minister said a comprehensive campaign against power theft and defaulters by the power division is yielding the results. He informed the IMF delegation of the technical and system improvement measures undertaken in the power sector. “In areas where hooks and power theft from lines was rampant, the aerial bundled cables are being installed by the discos (distribution companies), while in areas where there problem is more sophisticated like the major urban areas the AMI (advanced metering infrastructure) meters are in execution.”

Khan said 80 percent of the total feeders in the country are now load management free. “We are now investing the distribution system both to improve its technical viability and also increase its human resources to make these entities perform efficiently.” The minister also informed the IMF delegation about the new renewable energy policy whereby the government is targeting to increase share of indigenous resources and cutting down the prices of the electricity for the consumers besides reducing dependency on imported fuels.

“We intend to increase the share of indigenous resources up to 75 percent,” he added. Ramirez Rigo appreciated the efforts by the power division in meeting its targets. He also appreciated the efforts of power division in formulating the new renewable energy policy.

“Power is an integral part of the IMF program,” he said. “Power sector performance in their views is encouraging as they had a detailed discussion with various stakeholders.” IMF mission chief appreciated the shift toward utilisation of indigenous resources leading towards reducing the prices of electricity in the country “that will ultimately benefit all walks of life”.

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