The Pakistan circular debt in the power sector has reached a staggering Rs2.655 trillion in the first 11 months of FY24, a slight increase from Rs2.646 trillion during the same period in FY23, reflecting a growth of Rs9 billion. In FY23, the circular debt was recorded at Rs2.310 trillion.
Under the IMF agreements, the government is required to reduce the Pakistan circular debt from Rs2.655 trillion to Rs2.310 trillion by June 30, 2024. However, the Power Division has yet to upload the complete circular data for FY24, which ends on June 30, to its official website. The circular debt surged primarily due to payables of Rs1.780 trillion owed to power producers, Gencos’ payables totaling Rs110 billion to fuel suppliers, and loans amounting to Rs765 billion held in the Power Holding Company (PHP). Notably, the circular debt had climbed to Rs2.729 trillion by April 2024, before dropping to Rs2.655 trillion in May.
Additionally, Discos’ losses have soared to Rs230 billion, despite ongoing efforts to combat electricity theft. The system has also experienced recovery losses of Rs279 billion during the first 11 months of FY24, alongside prior adjustments of Rs155 billion.
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On 30 August 2024, the Power Division finally uploaded the circular debt reports for February, March, April, and May 2024, after a delay of seven months. The report for June will be made available following approval from Federal Minister Awais Leghari. Officials from the Power Division indicated that the Pakistan circular debt for the entirety of FY24 will be reduced to Rs2.3 trillion after settling outstanding dues to Independent Power Producers (IPPs) as mandated by the IMF.
