KP sets up debt management fund to ensure timely loan repayments

PESHAWAR, June 13: The Khyber Pakhtunkhwa government has created a Debt Management Fund to ensure timely repayment of government's loans and improve financial stability.

In a budget document issued here Friday, the initiative was part of broader efforts to control future debt pressure.

In fiscal year 2024-25, the provincial government repaid a significant Rs 49 billion in outstanding loans, which included Rs 18 billion in markup.

To further strengthen debt management, the Finance Department has issued strict directives to all government departments.

Moving forward, departments must consult with the Finance Department before securing any new loans. 

The policy aims to ensure that new loans are only acquired for revenue-generating projects, where the project's income can cover loan repayment, thereby preventing an increase in the province's financial burden.