Circular debt in Pakistan’s power sector rose to Rs.1.675 trillion by 30 June 2026; the power division presented the details in the National Assembly.
The debt stood at Rs.1641 billion at the end of the 2024-25 financial year, marking an increase of Rs.34 billion over the year.
The Power Division attributed the rise to outstanding payments for electricity supplied from the national grid to K-Electric (KE).
It said a case seeking recovery of the outstanding dues from KE was pending in court.
Officials also said agreements with independent power producers (IPPs) based on the “take-or-pay” model had been terminated and replaced with a hybrid take-and-pay model in an effort to reduce circular debt.
The Power Division has also disclosed that 15 villages in Dera Ismail Khan remain without electricity.
It said that a project to provide electricity to these villages has been planned for the 2026-27 financial year.
However, completion of the project depends on the release of funds and the availability of equipment, according to the Power Division.