Pakistan's Historic Restructuring Deal to Combat Power Sector Debt
Pakistan has signed a significant financing agreement with 18 banks to tackle its rising power sector debt, marking a historic restructuring move. This move is aimed at resolving the circular debt crisis, which has reached 2.4 trillion PKR. The government plans further reforms including privatizing power distribution.
- Country:
- Pakistan
In a significant financial maneuver, Pakistan inked a record-breaking PKR 1.2 trillion restructuring deal with a consortium of 18 banks on Thursday. This move marks a pivotal step in addressing the nation's escalating power sector debt crisis.
The ceremony, overseen by Prime Minister Shehbaz Sharif from New York, was lauded as a breakthrough effort in tackling a debt circling crisis, swelling to PKR 2.4 trillion, or 2.1% of the GDP. Sharif praised the task force responsible for reaching this milestone and emphasized initiating privatization of power distribution companies (DISCOs) alongside minimizing line losses.
The restructured financing is deemed a mutually beneficial setup by Finance Minister Muhammad Aurangzeb, and is expected to fortify efforts against the circular debt dilemma. However, despite strides in reform, some skepticism persists concerning the permanency of the solution.
(With inputs from agencies.)
Google News