Minister for Power Sardar Awais Khan Leghari announced that negotiations are nearly complete for loans amounting to Rs1.34 trillion. These funds aim to address the power sector’s circular debt, which currently totals Rs2.4 trillion. Leghari stated that once banks submit their term sheets, the agreements will be finalized. This deal is expected to reduce the circular debt by Rs300-335 billion.
The minister explained that the loans will be repaid through a debt servicing surcharge of Rs3.23 per unit. Both current and future governments will continue to make repayments using this system. Furthermore, Leghari highlighted ongoing discussions with China regarding debt reprofiling and the conversion to local coal. He reassured that these talks are progressing smoothly.
Leghari also mentioned that tariff rebasing is expected in June 2025. This may lead to further price reductions as ongoing reforms take effect. He emphasized that their reforms aim to create a sustainable reduction mechanism based on efficiency. He pointed out that without these reforms, the International Monetary Fund (IMF) would not have supported significant price cuts.
In addition, the minister revealed plans for the centralized trading of bulk power markets (CTBCM) to start by the end of this year. The initial plan includes bilateral trading of 800-1000 MW of electricity. Leghari expressed optimism that continued reforms will significantly lower electricity prices, benefiting consumers in the long run.