Finance Minister Muhammad Aurangzeb has hailed the Rs1.2 trillion bank loan secured to settle Pakistan’s circular debt as the “largest financing and largest restructuring transaction” in the country’s history.

On Wednesday, the government signed loan facilities worth approximately Rs1.225tr with 18 banks to settle the outstanding dues of Independent Power Producers (IPPs) parked in circular debt. These dues will be serviced through a Rs3.23 per unit surcharge on consumers for a period of six years.

The signing ceremony was held at the PM Office, witnessed virtually by the prime minister from New York. No official announcement was made, although ministers confirmed the signing of the agreement. Under the agreement, the government will have 30 days to request disbursements from banks for prompt utilisation to avoid penalties.

Today, the ceremony was aired on television, with both the premier and the finance minister addressing the gathering.

In his remarks, Aurangzeb said that facility “resolves the structural issues of the power sector”.

“Ultimately, it’s all for the benefit of Pakistan and the benefit of the consumers,” he said, branding it a “win-win situation”.

© Dawn Business