Unpaid bills between Pakistan's power distributors, generators and fuel suppliers - 'circular debt' - stood at Rs1.835 trillion at end-June 2026, Rs221 billion above the ceiling agreed with the IMF, despite a Rs1.275 trillion bank refinancing deal repaid through a surcharge on electricity bills.
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Circular debt reached Rs1.835 trillion at end-June 2026, exceeding the IMF ceiling of Rs1.614 trillion by Rs221 billion; officials blamed K-Electric dues and weak distribution companies
Circular debt drives high power tariffs, fiscal risk and unpaid dues to independent power producers, including Chinese CPEC plants, and is a core IMF programme condition. It also shapes how attractive Pakistan's energy sector is to US and other foreign investors.
