- Govt to pay out payments in current or next week.
- RS1.275 trillion loans for running PHL and IPP charges.
- Consumers to repay energy sector loans over six years.
In a major economic step aimed at reviving Pakistan’s troubled energy sector, the government is intended to cut the power sector’s circular debt from a staggering RS2,381 trillion to around RS561 billion by making payments on RS1,275 billion obtained from 18 commercial banks.
“We will pay out in the current or next week, the amount of RS1,275 billion to limit the threat of circular debt in the electricity sector to close to RS561 billion as it has been promised with the IMF,” was a senior official in the Power Division in love with The news.
“The borrowed loan of RS1,275 billion from commercial banks will be used by Central Power Buy Agency-G (CPPA-G) to repay all PHL loans (RS683 billion) and to clear the remaining share of interest-bearing arrears to power producers (RS569 billion).
The Central Power Calk Agency-G (CPPA-G) will elaborate on the payments, and this is how the circular debt will be led to RS561 billion, which will later be uploaded at the official Power Division site.
“The credit for reducing the circular debt in a large way goes to the Task Force for the Elsector, which consists of adviser to Prime Minister Muhammad Ali, LT-General Zafar Iqbal, and official experts from SECP, CPPTA-G and NEPRA, who through negotiations with IPPS, cleared clearing RS348 MILLIARDS Budgeted substrate and RS221 billion of CPPA). “
However, in a large deal, the Task Force has already managed to get late payment interests (LPIs) on IPPS on RS387 billion waived. The amount of RS254 billion has been cleared through a further budgeted subsidy for circular debt preparation.
RS224 billion in the head of non-interest and RS337 billion interest-bearing obligations, which means that RS561 billion will remain like circular debt. This remaining stock will be treated through reforms and efficiency of discos.
Electricity consumers will withdraw the loan of RS1.275 billion through debt service Supplementary fee (DSS) of RS3.23 per year. Unit already in place and electricity consumers are already paying it through electricity bills, so there will be no new burden for consumers. However, consumers during the latest scenario will continue to pay it for the next 6 years to relieve the loan of RS1.275 billion. He said the addition of RS3.23 per Unit is not the new one as it is already in place, but it will now last 6 years to pay the loan.
To a question, he said that the addition of RS3.23 per Unit has already reached the 10 % sheath and the government does not intend to increase the captain.
However, on the IMF’s insistence, the 10% cap has been removed as it was a structural benchmark.
