Energy sector's circular debt surges to Rs2.39 trillion

Despite the International Monetary Fund's (IMF) instructions to reduce the circular debt in the energy sector, it increased by Rs83 billion to Rs2.39 trillion in the current fiscal year, according to a report presented to the National Assembly on Tuesday.

The report, which responded to questions about the power and energy sector, revealed that the authority received Rs97.72 billion as capacity payments in the year.

“Between the fiscal years 2023 and 2024, the circular debt in the energy sector rose by Rs83 billion, up from Rs2.31 trillion in FY2022-2023,” the report stated.

In FY2021-2022, circular debt decreased by Rs27 billion, ending the year at Rs2.25 trillion. The report indicated that circular debt was Rs2.28 trillion in FY2020-2021 after an increase of Rs130 billion. In FY2019-2020, it rose to Rs2.15 trillion, reflecting an increase of Rs5.35 billion.

From June 2023 to September 2024, Independent Power Producers (IPPs) paid a total of Rs9.79 trillion in capacity payments, which included Rs13.7 billion and Rs11.3 billion to two Chinese energy companies.

Port Qasim Electric Power Company received Rs12 billion from consumers in capacity payments. 

According to the report, eight coal-run and 11 gas-fired IPPs paid Rs7.18 trillion and Rs7.26 billion, respectively, in capacity payments, while three hydropower-operated IPPs gave Rs10.6 billion. 

However, 11 furnace oil-run IPPs received Rs81.6 billion as capacity payments.