- Payment requests to electricity producers are at RS1.608TR.
- Total circular debt flat around RS2.381Tr.
- Losses due to disco problems recorded at RS170BN.
Islamabad: In their attempt to combat the circular debt of 2,381 billions of rupees in the country, government officials are in talks with the banks to finalize the term sheet to borrow 1,240 billion rupees, The news reported on Monday.
The senior officials aware of the development said that the discount rate had increased to 12% against 22%.
“In the time to come, the discount rate can further drop. The authorities want to take advantage of the situation and borrow the amount of RS1,242 Billions,” said an official, adding that the authorities concerned are engaged with the banks and wish to finalize the term sheet before the mission of the International Monetary Fund (IMF).
The development is added to the backdrop of two IMF missions which take place to visit Pakistan in the coming weeks.
The first mission will focus on discussions concerning climate financing, while the second will carry out the first progress of the country’s progress under the ease of extensive funds of $ 7 billion (EFF).
Expanding government talks with banks, the manager revealed that the Governor and the Minister of Finance of the State Bank of Pakistan (SBP) were one of the talks.
He noted that government officials wanted to borrow 1,240 billion rupees on the interest rate from 6 to 7% for seven years. However, banks wish to lend loans to a Kibor + 1 rate.
“Once the mandate sheet was finalized, the government will borrow loans from banks for seven years which will be reimbursed by electricity consumers through an additional RS3.23 debt service per unit in the rate “Said the manager.
The manager said that on 2.4 rummage of rupees, nearly 720 billion rupees had already been settled by paying the past contributions of six independent electricity producers (IPP) whose contracts were terminated and 15 PPIs whose agreements Electricity purchase is activated on “taking and remuneration” model.
The authorities have paid with IPPS the amount of 450 billion rupees (300 billion rupees are paid and 150 billion rupees in the head of the LPS are canceled). And RS286 billion of WAPDA contributions were also paid without payment of interest.
“If the circular debt is resolved, it will facilitate the energy sector which is open on the private market of the electricity market and distribution companies (discos) are privatized,” said the official.
According to the latest data on circular debt in the electricity sector until November 2024, the country’s circular debt has slightly increased from RS12 billion to RS2.381 billion during the period of July-November for the financial year 25 and RS2.393 billion in June 2024.
However, losses in the wake of the ineffectiveness and the subrection of nightclubs amounted to RS170 billion (94 billion rupees due to ineffectiveness and 76 billion rupees due to the subreation) .
Payables to electricity producers amounted to RS1,608 Billions with loan amounts stationed in the private company Power Holding (PHPL) at 683 billion rupees.
However, production companies (GENCOS) payable to fuel suppliers amounted to 90 billion rupees in the first five months of the fiscal year.
The data show that the budgetary but unprecedented subsidies amounted to RS5 billion, while the costs of interest on PHPL loans and PPI payments have remained at 70 billion rupees.
In the data of November 2024 downloaded on the website of the food division, it was also highlighted the cost of production pending under the head of QTA (quarterly tariff adjustments) and the FCA (adjustments of charges fuel) amounted to Rs31 billion. The data also shows that the amount of RS11 billion has been payable by K-Electric in CPPA.
