In a landmark move, Pakistan’s Finance Ministry has announced the successful resolution of Rs1,225 billion (Rs 1.225 trillion) in power sector circular debt — a pivotal step toward restoring fiscal stability and bolstering investor confidence.
This historic endeavour was led by the Prime Minister’s Task Force on Power in coordination with the Ministry of Energy, the State Bank of Pakistan, the Pakistan Banks Association, and 18 partner banks.
Under the agreement, Rs660 billion in existing loans have been restructured, while Rs565 billion in new financing has been arranged to settle overdue payments to power producers. Importantly, no new burden will fall on consumers — all repayments will be drawn from the already-levied surcharge of Rs3.23 per unit.
This exercise also frees Rs660 billion in sovereign guarantees, which will enable liquidity to flow into key sectors including agriculture, SMEs, housing, education, and healthcare.
Finance Minister Muhammad Aurangzeb hailed this resolution as a “decisive step” toward renewed fiscal discipline, energy sector sustainability, and investor confidence. He emphasised that the achievement reflects the strength of collective leadership, coordination across institutions, and public-private collaboration.
According to the government, the deal sets a precedent in how Pakistan can tackle structural challenges through innovation, unity, and determination — and positions the country to reallocate resources to sectors that drive social and economic development.
The agreement is being praised as a “landmark financing” in Pakistan’s history, and many see it as opening new pathways toward sustainable economic growth
