Rs41b approved by ECC for payments to IPPs and PSO
Islamabad
The circular debt and power outages issue continues to create nightmares for the government. On Wednesday, the government acquired a loan of Rs41b from commercial banks to make payments owed to IPPs, distribution companies and state-owned fuel supplier Pakistan State Oil (PSO). This was approved by the Economic Coordination Committee (ECC) in a meeting chaired at the PM office by Finance Minister Ishaq Dar.
The IPPs Advisory Council (IPPAC) had on Tuesday claimed that the figure of payables had reached Rs191b, along with cash flow constraints and if the payment wasn’t made immediately, they may shut down their power plants.
The due process for this loan to be disbursed to the aforementioned parties will take 8-10 days to complete. Last month, it had been reported that the circular debt figure had crossed Rs400b, and this loan of Rs41b will help to bring it down to Rs360b, but the stock of debt will rise to a staggering figure of Rs415b. To offload the LNG circular debt of PSO, the Ministry of Petroleum and Ministry of Finance are arranging an Rs29b syndicating financing facility.
