Govt Finally Pays Off Rs. 92 Billion Interest Dues to OGDC

Oil and Gas Development Company Limited (OGDC) has received its twelfth and final interest payment of Rs. 7.725 billion from Power Holding (Private) Limited under the government’s circular debt settlement plan, completing total interest receipts of Rs. 92 billion.

The company disclosed the development in a notice to the Pakistan Stock Exchange on Wednesday, stating that the payment was made under a government-approved mechanism aimed at reducing circular debt in the energy sector.

With the latest installment, OGDC has now received the entire Rs. 92 billion interest amount approved by the government. In 2024, the federal government had also approved repayment of Rs. 82 billion, representing the principal amount of OGDC’s investment in privately placed term finance certificates issued by Power Holding (Private) Limited.

The interest repayment plan envisaged 12 equal installments starting from July 2025, with the final payment marking the completion of the schedule. OGDC said the receipts reflect continued progress under the government’s broader initiative to address and gradually reduce circular debt within the energy chain.

Pakistan’s circular debt has remained one of the biggest challenges facing the power sector, weighing on cash flows of energy companies and increasing pressure on public finances. The settlement mechanism involving Power Holding was introduced to ease liquidity constraints and improve the financial health of state-owned energy firms.

OGDC, incorporated in 1997, is Pakistan’s largest exploration and production company and remains a key contributor to domestic oil and gas supplies.