Power Sector Facilities of Rs. 151 billion to ease out circular debt and improve liquidity

Islamabad: Government of Pakistan has arranged financing facilities of Rs.151 billion from domestic banks for PEPCO companies to enable them to pay off their liabilities towards IPPs and other companies, which would help reduce the burden of circular debt in power sector.

The financing facilities for PEPCO system was approved by the Economic Coordination Committee of the Cabinet on 20 January, 2012. The intervention comprises of two tranches i.e. first tranche of Rs. 136 billion, which was executed on 21 February, 2012 and the second tranche of Rs. 15 billion which is expected be concluded shortly.

The provision of financing facilities is expected to ease up the circular debt in power sector and enhance liquidity of the system. With improved liquidity, the generation companies will have funds to buy fuel thus improving the overall supply of electricity and bringing down the unscheduled load shedding in the country.

The transaction would not have any impact on the federal budget as the debt servicing of the aforementioned facilities would be done out of the cash flows of PEPCO system.

For more information, contact:
Haji Ahmed Malik
Principal Information Officer
Press Information Department (PID)
Tel: +9251 925 2323 and +9251 925 2324
Fax: +9251 925 2325 and +9251 925 2326
Email: piopid@gmail.com

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