Pakistan’s electricity circular debt reaches 1837 billion rupees

ISLAMABAD: Pakistan’s power sector circular debt increased by 223 billion rupees during the first five months of the current fiscal year, from July to November 2025, bringing the total to 1,837 billion rupees. In June 2025, the sector’s circular debt stood at 1,614 billion rupees.

Sources said that despite agreements signed two months earlier to reduce circular debt by 1,225 billion rupees, the sector still experienced an increase. In September 2025, the government signed agreements with banks, yet the debt rose by 144 billion rupees during October and November.

The circular debt was 1,693 billion rupees in September 2025, showing a 223 billion rupee increase over the first five months compared to June. However, compared to November 2024, when the power sector’s circular debt was 2,381 billion rupees, the current debt reflects a reduction of 544 billion rupees over the year.

The September 2025 agreements involved the federal government and 18 commercial banks to address the growing circular debt in the electricity sector.