ISLAMABAD: Pakistan’s power sector circular debt stock dropped to Rs1.614 trillion by the end of June 2024-25, down from Rs2.393 trillion recorded a year earlier, representing a net reduction of Rs779.58 billion, AGP’s latest disclosures reveals.
The audit report, which covers an official expenditure of over Rs985.8 billion across 74 formations under the Ministry of Energy (Power Division) and Nepra, revealed that the massive drop was not due to structural performance but was instead driven by extra-budgetary government interventions and commercial borrowing.
However, despite the drop in the total debt stock, state-owned distribution companies (Discos) continued to severely underperform. During the 2024-25 financial year, Discos recorded actual transmission and distribution (T&D) losses of 17.55 percent, significantly exceeding the 11.77 percent targets set by the National Electric Power Regulatory Authority (Nepra).
This 5.8 percentage point deviation resulted in an unrecovered energy value of approximately Rs114.5 billion. Total inefficiencies from T&D losses and low revenue recovery collectively cost the sector Rs265 billion.
Furthermore, Discos fell short by approximately Rs132 billion in their recovery performance due to electricity theft, defective metering, incorrect billing and delayed government and public-sector recoveries.
The report also highlighted that the imposition of a Rs3.23/kWh Debt Service Surcharge (DSS) failed to stop circular debt accumulation, spreading financial strain to consumers under K-Electric as well.
The report details severe transmission constraints within the National Grid Company (NGC).During 2024-25, Non-Projective Missed Volume (NPMV) attributable to transmission limitations amounted to approximately Rs13.3 billion, representing energy that could not be evacuated from low-cost generation sources.
Compounding these issues, transmission inefficiencies contributed to an elevated capacity payment burden, reaching approximately Rs1.9 trillion during the 2024-25 financial year. Take-or-pay obligations alone created a financial burden of Rs86.456 billion between 2021 and 2024.Key infrastructure assets remained heavily underutilised.
