Pakistan’s Power Sector Circular Debt Rises by Rs223 Billion in First Five Months of FY2025–

Islamabad: Pakistan’s power sector circular debt increased by Rs223 billion during the first five months of the current fiscal year (July to November 2025), pushing the total circular debt to Rs1,837 billion, sources said. The figure stood at Rs1,614 billion in June 2025.

According to sources, the increase has been recorded despite agreements aimed at reducing circular debt by Rs1,225 billion, signed two months earlier. The power sector circular debt continued to rise even after these measures.

In September 2025, the federal government signed agreements with commercial banks to help curb the growing circular debt. However, during October and November 2025 alone, the circular debt increased by Rs144 billion.

Sources said that by November 2025, the power sector circular debt reached Rs1,837 billion, compared to Rs1,693 billion in September 2025 and Rs1,614 billion in June 2025. This indicates a net increase of Rs223 billion during the first five months of the current fiscal year.

On a year-on-year basis, however, there has been a decline. Compared to November 2024, the circular debt in November 2025 shows a reduction of Rs544 billion, as the power sector circular debt stood at Rs2,381 billion in November 2024.

It is worth recalling that in September 2025, the federal government signed agreements with 18 commercial banks as part of efforts to reduce the mounting circular debt in the power sector.