Federal Minister for Energy, Sardar Owais Ahmad Khan Leghari, announced a significant breakthrough in Pakistan’s efforts to reduce circular debt, unveiling a new financing scheme aimed at cutting Rs. 1.225 trillion.
In a video message on the occasion of the scheme’s signing ceremony, Leghari said that when the current government assumed office, circular debt had reached Rs. 22.4 trillion. Since then, the Power Division has successfully reduced it by Rs. 800 billion.
“Today, we are signing a scheme that will further reduce circular debt by Rs. 1.225 trillion,” he stated.
He explained that consumers have been paying a debt service surcharge of more than Rs. 3 per unit, which previously went only toward interest payments, leaving the principal debt untouched. Under the new arrangement, the surcharge will now be used not just for interest but also for repayment of the principal amount.
Leghari emphasized that the government has set a target of bringing circular debt to zero within six years, calling the development a result of the Prime Minister’s vision and guidance.
“This achievement is the outcome of collective efforts by all institutions, turning the dream of eliminating circular debt into a reality,” he added.
