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Pakistan Approves Guarantees and Letter of Comfort to Unlock Rs1.225 Trillion Power-Debt Loan

The move provides the sovereign comfort banks required to release the circular-debt financing.

Overview

  • ECC cleared a Rs659.646 billion government guarantee and authorised a Letter of Comfort to enable bank disbursements under the Rs1.225 trillion facility.
  • The financing targets settlement of Power Holding Limited liabilities and overdue payments to independent power producers.
  • Electricity users will repay the principal and interest through a Rs3.23 per unit surcharge agreed in the lending arrangements.
  • The committee approved waiving roughly Rs120 billion in PAEC late-payment interest, with about Rs22 billion to be recovered from gas consumers via Ogra adjustments.
  • CPPA-G and PAEC were authorised to execute negotiated settlements and seek revised nuclear tariffs at Nepra, while gas from the Mari Field was reassigned to fertiliser plants to secure feedstock.