The Power Division on Monday denied media reports claiming circular debt increased by Rs224 billion between July and November 2025. Officials called the reports misleading, saying they lacked updated data and failed to consult the ministry. The division said seasonal debt fluctuations are normal and expected to normalize by the fiscal year’s end.
The ministry clarified that comparing June 2025 debt with November 2025 data is misleading because it covers only three months. It emphasized the bank refinancing agreement in September 2025 was meant for cheaper debt replacement over five to six years. The reports incorrectly linked short-term variations to the refinancing plan.
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Officials added that comparing July-November 2025 with the same period in 2024 shows seasonal factors caused temporary increases. By December 2025, circular debt flow had already declined, resulting in a net increase of less than Rs80 billion. Analysts said this trend aligns with historical patterns and seasonal adjustments.
The Power Division highlighted operational efficiency gains in the power sector. Inefficiencies in distribution companies dropped by Rs193 billion in FY 2024-25 compared to the previous year. Further improvements during July-December 2025 reduced inefficiencies by Rs49 billion, underscoring continued government financial discipline.
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A Rs1,225 billion Circular Debt Settlement Plan will refinance existing debt over six years at favorable terms. The first tranche has been received, and the division expects the debt stock to be fully contained by the end of the fiscal year. Seasonal variations, it said, will not affect consumer electricity tariffs.