NEWS · 19 August 2026
Pakistan’s power sector circular debt rose by Rs 61 billion in FY2025-26 to Rs 1.675 trillion at 30 June 2026, up from Rs 1.614 trillion a year earlier. Losses and weak recovery at the distribution companies remained the largest contributors.
What happened
Circular debt is the unpaid money that builds up in the power chain when distribution companies collect less than electricity costs, and the shortfall passes back to generators and fuel suppliers. The News reported the FY2025-26 figures on 19 August 2026.
Main contributors in FY2025-26, as reported
| Item | Amount |
|---|---|
| Distribution company inefficiencies | Rs 262 billion (Rs 265 billion the year before) |
| Non-payment by K-Electric | Rs 194 billion |
| Shortfall in bill recovery | Rs 64 billion |
| WAPDA invoice arrears | Rs 63 billion |
| Interest charges on IPP payments | Rs 14 billion (down from Rs 58 billion in FY25) |
| Other adjustments | Rs 75 billion |
Against these, the government paid Rs 302 billion in subsidies to reduce the accumulated debt, which is why the net increase for the year came to Rs 61 billion.
What it means for you
Circular debt is ultimately recovered from electricity consumers and taxpayers, through tariffs, surcharges and subsidies. Together with capacity payments to IPPs and monthly fuel adjustments, it keeps grid electricity expensive. Every unit you generate and use yourself is a unit you do not have to buy at those prices.
Buy fewer units from the grid. Solar Net Metering designs solar systems for your own use and handles net billing across Pakistan: 10 kW net billing costs Rs 160,000 with LESCO and K-Electric, and Rs 200,000 with the other distribution companies.
اردو خلاصہ
مالی سال 2025-26 میں بجلی کے شعبے کا گردشی قرضہ 61 ارب روپے بڑھ کر 30 جون 2026 تک 1,675 ارب روپے ہو گیا۔ سب سے بڑی وجوہات میں بجلی تقسیم کار کمپنیوں کی نااہلیاں (262 ارب روپے)، کے-الیکٹرک کی عدم ادائیگی (194 ارب روپے) اور بلوں کی کم وصولی (64 ارب روپے) شامل ہیں۔ حکومت نے قرضہ کم کرنے کے لیے 302 ارب روپے کی سبسڈی ادا کی۔ یہ بوجھ آخرکار صارفین اور ٹیکس دہندگان پر آتا ہے۔