Prime Minister Shehbaz Sharif has said that circular debt has been consuming Pakistan’s economy for years, and overcoming it is a significant achievement for the government.
Speaking via video link from New York at the inauguration ceremony of the circular debt elimination plan in the energy sector, the Prime Minister noted that the issue had been continuously escalating, and tackling it was the result of collective efforts.
He explained that under the leadership of Energy Minister Awais Leghari, a task force successfully negotiated with independent power producers (IPPs) and formulated a plan to eliminate the debt over the next six years.
Addressing the ceremony, Energy Minister Awais Leghari said that circular debt had placed a heavy burden not only on the energy sector but also on the economy. However, a clear consensus-based strategy has now been developed, which forms part of broader energy sector reforms.
Finance Minister Muhammad Aurangzeb added that efforts had been underway for over a year to resolve the issue, and the launch of this scheme marks a milestone. He emphasized that structural issues in the power sector are being addressed and that this plan will have far-reaching impacts.
PM Shehbaz Sharif further shared that he recently met with the Managing Director of the IMF, who appreciated Pakistan’s economic progress. He acknowledged, however, that line losses in the power sector remain a major challenge, and the next phase of reforms will focus on addressing them.
