In my earlier articles, I highlighted Pakistan’s power sector crisis and the urgent need for structural reforms. A central recommendation was the privatization of Distribution Companies (DISCOs). These entities, responsible for delivering electricity to end-users, remain the weakest link and consistently bleeding losses, undermining financial stability, and perpetuating circular debt. The Ministry of Energy (Power) deserves recognition for taking note of the CTBCM consultations and promptly organising a comprehensive seminar in Islamabad, with another now planned in Karachi, to engage real stakeholders and address their concerns. Yet, the same level of urgency and focus is still missing when it comes to the DISCOs themselves, the very institutions whose inefficiency continues to fuel circular debt and cripple the sector’s sustainability.

While the reduction in circular debt is welcome and the effort put into renegotiating financing is commendable, the method of achieving it through bank borrowing, or fiscal injections, even when subsidy requirements are reduced remains unsustainable and hardly a cause for celebration. The initial Rs. 801 billion injected to reduce circular debt came from fiscal space that could have been allocated to make industrial power competitive to drive the economy and further directed to education or healthcare for millions.

The subsequent debt of Rs. 1,225 billion to pay off circular debt has been financed through banks at KIBOR minus 0.9%.This will ultimately be recovered from consumers over the next six years. Such measures may provide temporary relief, but they do not qualify as structural reform — they are merely operational fixes. The burden is simply shifted into future liabilities, locking consumers into paying Rs 3.23 per unit on top of electricity rates for six more years, without addressing the underlying inefficiencies. The entire scheme is only sustainable if circular debt does not resurface — an assumption that recent history of discos performance makes difficult to believe.

According to NEPRA’s........

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