The Economic Coordination Committee (ECC) has approved a government guarantee worth Rs. 659.6 billion to help resolve the growing circular debt in Pakistan’s power sector. The move aims to address the financing gap of Rs. 1.225 trillion and improve liquidity within the energy system.
The ECC meeting, chaired by Finance Minister Muhammad Aurangzeb, focused on easing the financial strain caused by delayed payments to Independent Power Producers (IPPs). The approved guarantee will help Power Holding Limited settle its outstanding debt and overdue obligations to IPPs.
To ensure timely implementation, the ECC authorized the Finance Division to issue a Letter of Comfort. This step will facilitate the execution of the debt settlement plan and support financial stability in the power sector. The committee also directed the Power Division to provide a detailed timeline for the closure of Power Holding Limited once all dues are cleared.
Officials said the decision could help stabilize the energy sector’s finances, reduce circular debt buildup, and restore confidence among power producers. It is also expected to improve the overall cash flow of the electricity supply chain and enhance operational efficiency.
Several federal ministers and senior officials attended the ECC meeting, including representatives from the Ministries of Power, Petroleum, and Commerce, as well as key regulatory bodies.
In another development, the ECC approved a proposal from the Ministry of National Food Security and Research for the reallocation of funds within the Division. This approval allows the transfer of financial resources from the IPC Division through a technical supplementary grant to support ongoing agricultural research projects.
In other related news also read ECC approves massive funding for Parliamentarians’ schemes
The ECC’s recent decisions reflect the government’s commitment to stabilizing Pakistan’s energy and agricultural sectors through targeted financial measures and efficient resource allocation.
