Circular debt hikes by Rs79b in first quarter of FY2025-26

ISLAMABAD: Pakistan’s power sector circular debt increased by Rs79 billion in the first quarter (July–September) of FY2025-26, reaching Rs1.693 trillion by the end of September, attributed to seasonal and operational factors

According to the Power Division, the circular debt saw a renewed hike in the first three months of the new fiscal year.

The spokesperson said the increase of Rs79 billion “must be viewed in full context”.

“During the same quarter last year, circular debt had increased by Rs73 billion; however, by the end of that fiscal year, the overall stock of circular debt was reduced by Rs780 billion.”

Furthermore, the Power Division spokesperson said, “The current quarterly rise is therefore attributable to seasonal and operational factors that typically influence monthly flows and are expected to reverse over the course of the year.”

Energy experts said the buildup reflected lingering power theft, weak recoveries, and structural flaws within state-run distribution companies (Discos).

Receivables from K-Electric alone stood at Rs229 billion by September 2025, including Rs42 billion in principal and Rs187 billion in markup.

The growing receivables and debt pile-up have once again put pressure on the government to accelerate reforms and plug financial leakages that continue to burden the national exchequer.