Pakistani consumers can expect a 10 percent reduction in electricity bills by 2031, following the government’s landmark Rs1.225 trillion circular debt elimination plan signed on Thursday.
The agreement, the largest Islamic financing deal in the country’s energy sector, will retire Power Holding Limited (PHL) debt and clear dues to Independent Power Producers (IPPs).
Once the loan is fully repaid, projected between 2029 and 2031, the Rs. 3.23 per unit Debt Service Surcharge (DSS) will be removed from bills, providing direct relief to consumers. The deal, structured around Islamic finance instruments and involving 18 commercial banks, is expected to save up to Rs. 377 billion in late payment interest and inject critical liquidity into the power sector.
Officials say the move marks a decisive shift from ad hoc bailouts to a market-based, transparent repayment model, with the profit rate set below conventional market levels. The plan also saw rare coordination between civilian and military leadership, with key roles played by Army Chief Field Marshal Syed Asim Munir and Minister for Privatization Muhammad Ali.
While immediate bill relief is unlikely, authorities stress that the long-term impact will be substantial, stabilizing the sector and restoring investor confidence.
Stop fooling around. By 2031. Enough. Stop this BS
Will there be no circular debt from niw onwards?
please investigate the people that signed these 30 year agreements. I am sure there was corruption involved
people who live in homes even small homes are rapidly shifting to ongrid and hybrid solar