ISLAMABAD: Pakistan’ energy sector’s circular debt is estimated to have gone beyond a record Rs922 billion mark by end of November 2017.
According to a report submitted to the parliament this week, the Ministry of Finance has put the amount of circular debt at Rs472.678bn as of November 30, 2017.
The report, however, did not explain that another Rs450bn debt was separately parked with Power Holding Private Limited (PHPL) — a subsidiary of the power division — created to raise funds from commercial banks and is financed through surcharges built into the consumer tariff.
Minister of State for Finance Rana Muhammad Afzal Khan reported that the amount of the said circular debt (Rs472.678bn) of the sector payable to power generators, short term in nature, did not appear in annual State Bank report of 2016-17. The report only indicated long-term loans payable by economic groups of domestic and foreign financial institutions