Pakistan will borrow another $1.44 billion to deal with circular debt

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Pakistan is planning to borrow another loan to deal with the prevailing circular debt of the country.of $1.44 billion (200 billion Pakistani Rupees).

To curb the power sector circular debt, government may take the loan of $1.44 billion. However, the circular debt is significantly damaging the finances of private power producers and the government.

Pakistan’s economy and society have been racked by a decade of chronic electricity shortages which have crippled its manufacturing industries and stoked voter anger in the South Asian nation of 208 million people.

Independent power producers (IPPs), angry with late government payments, have warned they face a financial crisis, while economists fear rising the debt will further widen Pakistan’s yawning fiscal deficit, a key part of ongoing bailout talks with the International Monetary Fund.

Pakistan earlier this month raised 200 billion rupees through an Islamic bond to ease a financial crunch in its power sector, but critics say much more needs to be done

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