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Pakistan completes record PKR 659.6B settlement of PHL debt

Largest-ever capital-market transaction includes PES bond redemptions and syndicated loan repayments as government pushes to cut circular debt

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Haris Zamir

Business Editor

Experience of almost 33 years where started the journey of financial journalism from Business Recorder in 1992. From 2006 onwards attached with Television Media worked at Sun Tv, Dawn Tv, Geo Tv and Dunya Tv. During the period also worked as a stringer for Bloomberg for seven years and Dow Jones for five years. Also wrote articles for several highly acclaimed periodicals like the Newsline, Pakistan Gulf Economist and Money Matters (The News publications)

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Pakistan completes record PKR 659.6B settlement of PHL debt
A power transmission tower is seen, with the Bahria Icon Tower in the background
Reuters

Pakistan has completed a record PKR 659.6 billion settlement of Power Holding Limited (PHL) debts, marking the largest transaction in the country’s debt capital markets, Federal Power Minister Sardar Awais Ahmed Khan Leghari announced Wednesday on social media.

The settlement includes a PKR 399.6 billion redemption of Pakistan Electric Supply (PES) I and II bonds through the National Depository Mechanism (NDM) via off-market transactions, along with PKR 259.7 billion cleared across several syndicated financing facilities.

Leghari said the NDM portion of the transaction reflects the “maturity and strength” of Pakistan’s capital markets and their ability to handle large-scale financial operations.

“This landmark transaction is a core component of the PKR 1,225 billion Circular Debt Reduction Plan,” he said. “It reflects strong institutional confidence in Pakistan’s ongoing economic reforms, government initiatives, and the depth of our capital and Islamic finance sectors.”

Experts say the move provides a major boost to an energy sector struggling with circular debt, liquidity shortages and inefficiencies. By redeeming PHL obligations and restructuring financing liabilities, officials aim to improve the financial stability of power distribution companies, bolster investor confidence and set the stage for broader reforms.

Leghari said the government remains committed to structural energy-sector changes and long-term fiscal stability. He said officials are working with stakeholders to accelerate growth driven by reforms and strengthen the country’s energy outlook.

Financial analysts view the PKR 659.6 billion settlement as a milestone that shows Pakistan’s capital markets can support large-scale debt operations, a key factor in maintaining liquidity and stability across the energy industry.

With the settlement finalized, Pakistan moves closer to reducing circular debt, strengthening institutional credibility and laying the foundation for sustained energy-sector reforms and economic growth.

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