Pakistan’s power sector's circular debt increases by almost 6 percent in two months

Pakistan's power sector saw a substantial increase in its circular debt, rising by PKR 147 billion during the first two months of 2025 highlighting growing financial challenges in the country's energy sector, according to official documents on Tuesday.

Records indicate that the circular debt stood at 2,384 billion rupees in December 2024. By February 2025, it had escalated to PKR 2,531 billion.

January 2025 alone witnessed a PKR 60 billion increase, bringing the debt to PKR 2,444 billion by the end of the month.

February added another PKR 87 billion to the total, marking a cumulative rise of PKR 147 billion over just two months.

For comparison, by June 2024, the circular debt amounted to PKR 2,393 billion, underscoring the financial strain that has intensified in recent months.

The growing debt poses significant concerns for the stability of Pakistan's power sector and its ability to manage long-term financial commitments.

The revelation has raised alarms among experts, who warn of potential consequences for energy affordability and accessibility if measures are not taken to curb the escalating debt.