• The application manufacturers are on RS1.608tr.
• Total circular debt hovering around RS2.381TR.
• Loss due to problems with discos that are registered on RS170 billion

Islamabad: In their bid to tackle the country’s RS2.381 trillion Circular debt is government officials in lectures with banks to complete the term sheet for borrowing RS1.240 billion, The news reported Monday.

The top officials who are interested in the development have said that the discount rate has dropped to 12 % from 22 %.

“In the coming time, the discount rate may further fall. Authorities want to take advantage of the situation and borrow the amount of RS1,242 trillion,” said an official, adding that the relevant authorities are dealing with banks and wish to end the termark before arriving of the International Monetary Fund (IMF) Mission.

The development comes on the basis of two IMF missions to visit Pakistan in the coming weeks.

The first mission will focus on climate -financing discussions, while the second will conduct the first review of the country’s progress under the $ 7 billion expanded funding facility.

The expansion of the government’s talks with the banks revealed the official that the State Bank of Pakistan (SBP) governors and finance minister some of the negotiations.

He noted that public officials want to borrow RS1,240 billion on interest rates of 6-7% in seven years. However, the banks want to borrow loans for a Kibor+1 rate.

“Once the term sheet has been completed, the government will borrow loans from banks for seven years, which will be repaid by electricity consumers through the current debt serving supplements of RS3.23 per year. Unit in the tariff, ”said the official.

The official said out of RS2.4 trillion, almost RS720 billion has already been settled by paying the past fees for six independent power producers (IPPs) whose contracts were terminated and 15 IPPs whose power purchase agreements are turned on “Take and Pay “Model.

Authorities have settled with IPPS, with RS450 billion RS (RS300 billion paid and RS150 billion in the head of LPS is waived). And RS286 billion charges on WAPDA have also been settled without interest payments.

“If the circular debt is resolved, it will facilitate the electricity sector that is opened to the private power market and distribution companies (discos) are privatized,” the official said.

According to the latest circular debt data in the electricity sector until November 2024, the country’s circular debt is slightly tumbled from RS12 billion to RS2,381 billion in the July-November period of FY25 and from RS2,393 billion in June 2024.

However, losses in the wake of the inefficiency of the discos and the sub -discovery amounted to RS170 billion (RS94 billion.

The debt to power producers was on RS1,608 trillion with loan amounts parked in Power Holding Private Company (PHPL), which stood on RS683 billion.

However, the generational companies (Gencos) to be paid to fuel suppliers amounted to the RS90 billion in the first five months of the financial year.

Data shows that the budgeted but unpublished subsidies amounted to RS5 billion, while the interest on loans on PHPL and payments for IPPs stayed at RS70 billion.

In the November 2024 data, which was uploaded on the Power Division’s Website, it has also been highlighted in pending generation costs under the head of QTA (quarterly customs adjustments) and FCA (fuel charges adjustments) of RS31 billion. Data also shows that the amount of RS11 billion was paid for with K-Electric to CPPA.