Pakistan’s power sector circular debt increased by Rs47 billion in July 2025, the first month of the ongoing fiscal year 2025-26. Official data revealed that total circular debt reached Rs1.661 trillion in July, up from Rs1.614 trillion in June 2025.
Payables to power producers rose by Rs47 billion, moving from Rs861 billion in June to Rs908 billion in July. Meanwhile, GENCOs’ payables to fuel suppliers and the amount parked in Power Holding Limited (PHL) remained unchanged. GENCOs’ payables to fuel suppliers stayed at Rs93 billion, while the PHL account held Rs660 billion during the same period.
Interest charges of PHL and Independent Power Producers (IPPs) fell to zero in July, down from Rs58 billion in June. Additionally, the pending generation cost of Quarterly Tariff Adjustments and Fuel Charges Adjustments improved significantly, shifting into negative Rs6 billion in July from Rs85 billion in June 2025.
The burden arising from losses and inefficiencies of former WAPDA Power Distribution Companies (DISCOs) declined on a year-on-year basis to Rs41 billion in July 2025, compared to Rs64 billion in July 2024. Similarly, under-recoveries improved to Rs46 billion from Rs83 billion during the same period last year.
Receivables from K-Electric also decreased by Rs15 billion, from Rs218 billion in June 2025 to Rs203 billion in July 2025. This included Rs17 billion in principal and Rs187 billion in markup.
Notably, during FY2024-25, Pakistan’s power sector circular debt declined by Rs780 billion, from Rs2.393 trillion in FY2023-24 to Rs1.614 trillion. Analysts say the slight rise in July indicates a continuing need for structural reforms to manage the power sector’s financial health.
The data highlights that while some components of circular debt are improving, ongoing monitoring and policy interventions remain crucial to maintain stability in Pakistan’s energy sector.
In other news read more about: Circular Debt Soars Over Rs2 Trillion Despite Significant Tariff Hikes
