ISLAMABAD: Government of Pakistan has allowed the ministry of energy to secure around Rs36 billion from a syndicate of banks to clear power sector’s outstanding payments.
The decision was taken at a meeting of the Economic Coordination Committee (ECC) of the Cabinet headed by Finance Minister Asad Umar. “The ECC considered and approved the proposal of the ministry of energy (power division) for raising fresh financing of Rs35.806 billion through a syndicate of banks for PHPL (Power Holding Private Limited),” the finance ministry said in a statement.
The infamous circular debt, involving the whole energy sector’s chain, swelled to nearly one trillion rupees till July-end. The circular debt stood at Rs596 billion, while another Rs582 billion has been parked into the Pakistan Holding Pvt Ltd (PHPL) under the syndicated term finance facility. PHPL would recover the cost of loans through surcharges to be slapped on consumers through electricity bills.
Previous government settled Rs480 billion in circular debts immediately after assuming the helm of affairs.