Pakistan, June 14 -- The Power Division has shared its plan with the National Assembly to tackle the massive Rs2.42 trillion circular debt in the energy sector. Minister Awais Leghari confirmed the strategy is part of the Circular Debt Management Plan, backed by the Ministry of Energy, Ministry of Finance, and a task force. He added that Rs1.2 trillion will be raised to refinance existing debt through a loan with a six-year term and KIBOR minus 0.9% interest.

This loan will be repaid through a debt surcharge collected from electricity users. Meanwhile, savings from renegotiated IPPs contracts will be distributed over time, with a portion easing the debt and the rest benefitting consumers. Leghari stressed that managing the circular debt ...