The Ministry of Power stated that the agreed targets with the International Monetary Fund (IMF) for managing circular debt are fully on track, with the end-December target well within the set limits.Â
The IMF target requires maintaining circular debt additions below Rs461 billion, and as of December 19, 2024, the debt flow stands at Rs70 billion — significantly below the quarterly limit.
A Power Division spokesperson explained that the IMF target focuses on managing circular debt within quarterly limits, which the power sector is achieving successfully. During the first quarter of FY25 (July-September), Rs128 billion in subsidies were released, while Rs31 billion have already been released in the second quarter, with an additional Rs50 billion in process.
The spokesperson added that the power sector’s improved performance in loss reduction and recovery is expected to keep it well within the target for circular debt by the end of December 2024.Â
The ministry clarified that recent inter-ministerial correspondence had been misinterpreted as an SOS call, emphasizing it was routine communication regarding budget strategy and cash flow tracking.
The ministry dismissed claims linking subsidy releases solely to IMF target compliance, describing such assertions as misleading. Circular debt management involves multiple factors beyond subsidies, the spokesperson said.Â
The ministry reaffirmed its commitment to achieving the targets and stated that current progress indicates compliance is well under control.
Earlier, it was reported that the Ministry of Power had issued an urgent appeal to release Rs400 billion in subsidies by the end of December to prevent slippages in managing the circular debt. Failure to release the funds by the December 2024 deadline could lead to a breach of the agreed targets, the Ministry of Power warned.
So far, the Ministry of Finance has released only Rs82 billion of the Rs1,229 billion allocated for subsidies in the current fiscal year.
