ISLAMABAD: The International Monetary Fund (IMF) has called on Pakistan to ensure zero inflow into the power sector’s circular debt during the current fiscal year.
During a briefing with the visiting IMF delegation, government officials assured that no increase would be allowed in the stock of circular debt this year. Discussions covered issues including captive power plant levies, tariff rebasing, and the broader debt management plan. Authorities highlighted Pakistan’s strategy to eliminate circular debt entirely within three to six years.
The IMF was informed that the government’s Rs1.2 trillion deal with banks has already reduced circular debt to about Rs400 billion. From 2026 onwards, annual tariff rebasing will be implemented starting January 1 to ensure regular adjustments.
The delegation was also briefed on measures to stabilise the sector, including efficiency improvements, tariff restructuring, controlled subsidies, and other steps to prevent future accumulation of debt. Officials updated the IMF on Pakistan’s $100 billion remittance incentive scheme for the current fiscal year, as well as financial support provided to flood-affected communities and ongoing damage assessments.
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