Federal Minister for Energy (Power) Sardar Awais Ahmad Khan Leghari announced that the government has reduced circular debt by Rs780 billion, bringing it down from Rs2.394 trillion to Rs1.614 trillion — a reduction achieved without any manipulation.
Speaking at a press conference, Leghari shared details of the government’s Rs1.225 trillion circular debt management plan. Under this initiative, the debt will be repaid over six years through a Rs3.23 per kilowatt-hour debt servicing surcharge.
The minister highlighted that circular debt is a persistent burden on Pakistan, increasing annually due to systemic inefficiencies. He said the government has now secured agreements with banks at improved interest rates to permanently address the issue.
Leghari pointed out that when the PML-N government left office in 2018, circular debt stood at Rs1.1 trillion, which had risen to Rs2.25 trillion by 2022. Since returning to power, the government negotiated lower rates, saving between 3.5% and 5.5% on debt servicing costs.
For financing the circular debt, the KIBOR rate was fixed at minus 0.9%. Leghari noted that the government inherited Rs2.4 trillion in circular debt but succeeded in cutting it by Rs780 billion within a year, without any irregularities.
