ISLAMABAD: The Federal Cabinet on Wednesday gave the green light to a long-awaited agreement between the Government of Pakistan (GoP) and around 18 commercial banks for a significant Rs 1.275 trillion loan, following rigorous negotiations over each clause.
According to sources in the Power Division, the loan is intended to help reduce the country’s mounting circular debt, which currently stands at approximately Rs 2.4 trillion. The International Monetary Fund (IMF) has already backed the government’s plan to tackle the issue, which includes borrowing from commercial banks. Of the total debt, around Rs 700 billion is already recorded on the books of the Power Holding Company Limited (PHL) on behalf of power distribution companies (Discos).
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