The Government of Pakistan has allotted Rs 140 billion to power plants following the terms and conditions of the IMF. According to several media reports, Pakistan has released Rs140 billion to government-operated power plants.
The purpose is to solve the problem of circular debt in the energy sector under IMF laws and regulations. Pakistan must reduce circular debt in the energy sector by Rs 400 billion during fiscal year 2023-24 to meet the IMF’s criteria. Therefore, the Government has allotted Rs 140 Billion to power plants in Pakistan.
According to media sources, Karachi-Electric has already received Rs 57 billion to deal with the circular debt issue. The Government allocated Rs 260 billion to the electricity industry. And Rs 65 billion to gas firms in fiscal year 2023-24.
Pakistan is now participating in the IMF’s SBA (Stand-By Arrangement) program. It is working to meet the requirements for the next staff-level agreement.
The previous Pakistani Government made a deal with the IMF to keep the electricity sector’s circular debt at Rs 2.31 trillion. The allotted 140 billion to power plants will help sustain this deal to limit the sector’s debt to 2.31 trillion.
Pakistan and IMF (International Monetary Fund) reached a staff-level agreement on Nov 15, 2023. However, the approval of the Executive Board of IMF is necessary to get 3 billion dollars.
After reviewing the fulfillment of deals Pakistan did with the IMF, the Executive Board will approve in Feb 2024. So, the Government’s recent step is crucial to getting the approval of debt loans by the IMF.
It is important to mention that no government institution has yet issued an official notice or statement about allotted funds to power plants. The information provided in this article is based on Pakistani mainstream media. So, there can be no certainty until any official government channel validates this news.
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