ECC approves revised circular debt management plan for power sector

February 10, 2023 (MLN): The Economic Coordination Committee (ECC) of the federal cabinet has approved a revised plan for managing the power sector's circular debt, said a press release issued by the Finance Division on Friday.  

The Ministry of Energy presented a summary of refinancing the debt of Power Holding Limited and a surcharge to recover the markup payments.

The ECC approved the proposal to recover Rs76 billion, exempting non-Time of Use domestic consumers who use less than 300 units and private agriculture consumers for four months from March 2023 to June 2023, to recover the markup charges of PHL loans.

 An additional surcharge of 1 rupee per unit for FY24 will also be imposed to recover the additional markup charges not covered through the existing FC surcharge. The surcharges will be applicable to K-Electric consumers to maintain a uniform tariff across the country.

The ECC also deferred the principal installments payable by PHL for Rs283.287bn for two years from the execution of fresh facilities and directed the Finance Division to issue a government guarantee for the repayment of the principal, interest, and fees for the new facilities. The committee also approved the proposals for recovery of the staggered Fuel Charges Adjustment for August and September 2022.

The ECC deferred the electricity bills for commercial consumers in flood-affected areas for September 2022 until the next billing cycle and waived off electricity bills for non-Time of Use domestic consumers who use less than 300 units for August and September 2022.

An additional supplementary grant of Rs10.34bn was approved to cover the waiver of electricity bills in flood-affected areas.

In addition, the ECC allowed in principle a summary of the Finance Division on the Kamyab Pakistan Program, entrusting the State Bank of Pakistan to validate the claims of Wholesale Lenders after due diligence due to the non-existence of the Program Management Unit at the Finance Division.

The committee also gave a nod for the declaration of commerciality, Field Development Plan, and Development and Production lease for five years starting from January 25, 2022, for Jugan Field (Latif Block) to United Energy Pakistan.

Meanwhile, the ECC granted a two-year extension for the renewal of the Missa Keswal Development and Production Lease covering an area of 23.43 sq km in Rawalpindi, Punjab starting from April 11th, 2022.

During the meeting, the technical supplementary grant of Rs450 million was also approved in favor of the Ministry of Defence.

The meeting was presided over by the Federal Minister for Finance and Revenue, Senator Mohammad Ishaq Dar.

Copyright Mettis Link News