Pakistan Reduces Circular Debt by Rs780 Billion

Islamabad, August 5, 2025, 02:14 PM PKT — Pakistan has achieved a dramatic reduction in its power sector circular debt, slashing it by Rs780 billion to Rs1.614 trillion, as the Power Division credits lower line losses, improved bill recovery, and savings from renegotiated Independent Power Producer (IPP) contracts, unveiled during a public hearing on distribution companies’ (Discos) fourth-quarter tariff adjustment (QTA) with the National Electric Power Regulatory Authority (NEPRA), per official data. Discos’ better performance saved Rs200 billion, with additional measures driving further cuts, though industrialists warn of temporary relief, alleging reliance on Rs1.275 trillion in bank loans—with no separate surcharge planned for repayment.

The hearing exposed a 49% rise in industrial power consumption, clashing with industry claims of factory shutdowns, prompting NEPRA Member Maqsood Anwar to demand, “If industries are consuming more power, why are they claiming closures?” Officials attributed this to industries shifting from captive power to Discos, despite offline plants like Neelum-Jhelum hydropower, calling for a detailed briefing. Pending issues include 128,000 new connection applications (1,070 MW), 4,000 net metering requests (half with Faisalabad Electric Supply Company (Fesco)), and 70,000 defective meters. Quetta Electric Supply Company (Qesco) disconnected 13,000-14,000 agricultural tube wells for solar transition, cutting consumption. Web context on debt reduction shows mixed results, while posts found on X reflect skepticism—some question loan reliance, others seek transparency. Critically, the narrative of “debt relief” may mask structural weaknesses—web data hints at past failures, and X sentiment suggests distrust in sustained progress, pointing to ongoing risks.