Circular Debt: Burden of Payments to Power Companies Spikes to Rs. 1.8 Trillion

The burden of payments to Independent Power Producers (IPPs) has spiked to Rs. 1,800 billion, Finance Ministry sources told ProPakistani. Sources said IPPs are exerting considerable pressure on both the Ministry of Energy and the Ministry of Finance to pay them upfront. Sources reveal that funds are being released for the payment of IPPs, alongside demands for improved fuel supply, but possible delays in payments to IPPs have stirred panic about potential reductions in energy production. They said there are fears of incurring late payment surcharges due to delays, despite government guarantees. Finance Ministry sources added that the revolving credit of the energy sector has escalated to Rs. 2,310 billion. To address immediate needs, approximately Rs. 140 billion is poised to be released this week to pay off IPPs.