Pakistan’s power sector debt swells to Rs2.53tr

By MG News | April 09, 2025 at 07:16 AM GMT+05:00

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April 09, 2025 (MLN): Pakistan’s power sector is facing renewed fiscal strain as circular debt surged by Rs147 billion in the first two months of 2025 to reach Rs2.531 trillion by the end of February compared to Rs2.384tr in December 2024, according to official documents.

In January 2025 alone, the debt grew by Rs60bn, hitting Rs2.444tr. February saw an even steeper jump of Rs87bn which raised concerns over worsening recoveries, mounting interest costs, and delays in subsidy disbursements.

The circular debt stood at Rs2.393tr in June 2024, with an eight-month increase of Rs138bn.

The debt comprises unpaid bills to power producers, which disrupts the energy supply chain and forces reliance on expensive short-term fixes.

Energy experts warn that without structural reforms in power distribution and governance, the debt burden will continue to climb which will lead to potential tariff hikes and fiscal slippage.

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