Energy sector debt to be reduced by 38pc by FY21-end: PD
ISLAMABAD: The Power Division Tuesday said the energy sector debt will be reduced by 38 percent to Rs 330 billion at the end of current fiscal year (2020-21) as compared to Rs 538 billion in 2019-20.
The circular debt has witnessed a major drop of Rs 189 billion to Rs 260 billion during the first ten months of current fiscal year as compared to Rs 460 during the same period of 2019-20.
The country's energy sector total circular debt was estimated at Rs 2.41 trillion till April this year. The government has to pay Rs 91 billion to IPPs as the Federal Cabinet has also cleared the payment.
The major portion of circular build up amounts to over Rs 100 billion on account of unpaid and unbudgeted subsidies. The losses and inefficiencies of power distribution companies stand at Rs 21 billion.
Payables to IPPs which stood at Rs 1.038 trillion in 2019-20, will increase to Rs 1.432 trillion in 2020-21 whereas payables to Gencos will be Rs 101 billion against Rs 105 billion in 2019-20.
The government is also projecting a built up in circular debt by Rs 70 billion during May-June 2020-21.The total built up of circular debt has been Rs 330 billion during the entire current financial year. The total circular debt has been projected at Rs 2.48 trillion by end of current financial year.
An amount of Rs 208 billion contributes a major portion of previous year's adjustment.
Nepra's losses calculation is all assumption while the power sector experiences seasonality of losses.
Official documents reveal that loans parked in PHPL account will be Rs 948 billion at the end of current fiscal year as compared to Rs 1.007 trillion last year.
According to break up of Rs 260 billion built up circular debt, an amount of Rs 28 billion is on account of unpaid subsidies, Rs 74 billion unbudgeted subsidies, Rs 61 billion interest charge on delayed payment of IPPs, Rs 29 billion HPL mark up, Rs 60 billion pending generation cost, Rs 61 billion non-payment by K- Electric, Rs 21 billion Discos loss and Rs 99 billion previous adjustments.—MUSHTAQ GHUMMAN
