Shehbaz Sharif meets with Bill Gates, Bangladesh leader Prof Muhammad Yunus.
NEW YORK – Prime Minister Shehbaz Sharif on Thursday inaugurated Pakistan’s first-ever comprehensive energy circular debt elimination plan, describing it as a “historic breakthrough” that will pave the way for sustainable reforms in the power sector.
Speaking at the signing ceremony, the prime minister lauded the collective efforts of the government, financial institutions, and the task force for successfully negotiating and finalizing the plan.
Prime Minister Shehbaz Sharif joined the ceremony via video link from New York, while ministers, senior officials, regulators, international partners, and CEOs of power sector organizations attended the event at the Prime Minister’s House in Islamabad.
PM Shehbaz Sharif said, “This is the first time in Pakistan’s history that circular debt, which was swallowing our national resources, has been addressed in a structured and effective manner.” The prime minister highlighted the role of the Power Division, the Petroleum Ministry, and the Task Force in resolving longstanding issues. He paid special tribute to former caretaker energy minister Mohammad Ali, Secretary Power, and Lieutenant General (R) Muhammad Zafar Iqbal for their “tireless negotiations with Independent Power Producers (IPPs).”
Acknowledging the financial sector’s contribution, the prime minister praised Zafar Masood, President of the Bank of Punjab, as well as teams from Meezan Bank, Habib Bank, and other commercial banks for their pivotal support. He also commended the State Bank of Pakistan and the Federal Board of Revenue (FBR) for facilitating the plan’s execution.
The Prime Minister underscored that the initiative enjoyed the “behind-the-scenes support” of Chief of Army Staff Field Marshal Syed Asim Munir, which strengthened the government’s reform drive. “This is Team Pakistan’s success,” he stressed, adding that the International Monetary Fund (IMF) had also acknowledged Pakistan’s reform progress.
“Yesterday, I met the IMF Managing Director, who praised Pakistan’s commitment and speed of implementation. This is unprecedented recognition,” he said.
The Prime Minister urged all stakeholders to continue working with “courage and confidence” to overcome challenges in the energy sector. “Our macroeconomic indicators, business climate, and reforms are receiving international recognition. If we maintain this momentum, Pakistan will surely emerge from its difficulties,” he concluded.
The Federal Ministers for Power, Petroleum, and Advisors on Privatization were also present at the signing ceremony. Representatives of banks from COCPPA, Meezan Bank, and Habib Bank, formally endorsed the agreement on behalf of the financial sector.
Lieutenant General (R) Zafar Iqbal, head of the Task Force, highlighted the difficult but successful negotiations with IPPs, while senior officials of the Power Division and Petroleum Division emphasized the importance of privatization of distribution companies (DISCOs) and reducing line losses in the next phase of reforms.
The federal government in collaboration with a consortium of 18 banks finalised a Circular Debt Financing Facility worth Rs1.225 trillion to address the energy sector’s circular debt crisis.
Key features of the facility include financing at Karachi Interbank Offered Rate (KIBOR) minus 0.9%, a six-year repayment period, and the use of a Debt Service Surcharge (DSS) as the revenue stream. The plan is expected to retire the debt in less than six years while saving consumers Rs. 350 billion by reducing expensive late payment surcharges.
Of the total package, Rs. 659 billion has been allocated to retire Power Holding Limited (PHL) loans, while the remaining amount will be directed toward payments to Independent Power Producers (IPPs) and Government Power Producers (GPPs) to maximize relief for electricity consumers.
Also, Prime Minister Shehbaz Sharif on Thursday calling the polio eradication a high priority of the government, appreciated the valuable support extended by the Gates Foundation to Pakistan to achieve the objective.
The prime minister, in a meeting with Chair of Gates Foundation Bill Gates on the sidelines of 80th session of UN General Assembly, also lauded the Foundation’s support for improving immunization and nutrition as well as financial inclusion in the country.
He also appreciated the Gates Foundation’s generous donation following floods in Pakistan this year, also recalling the organisation’s significant contribution for relief efforts during the 2022 floods.
The prime minister said that partnership with the Gates Foundation would remain vital to achieve the objective of the polio eradication.
While emphasizing on the government’s initiative of extensive economic reforms, cashless digitisation and revitalisation of economy, the prime minister especially acknowledged the practical, positive and valuable cooperation of Gates Foundation.
Prime Minister Shehbaz and Bill Gates reaffirmed their shared commitment to continue working together to advance the cooperation in sectors of health, nutrition, digital transformation and larger socio-economic development of the country.
Meanwhile, Prime Minister Shehbaz Sharif on Thursday met Chief Adviser of the Government of Bangladesh Professor Muhammad Yunus wherein he emphasized Pakistan’s commitment to building a constructive and forward-looking ties with Bangladesh, rooted in mutual respect, trust, and shared aspirations of regional peace and prosperity.
In the “warm and cordial” meeting held on the sidelines of the 80th session of UNGA here, the two leaders reviewed the current state of Pakistan-Bangladesh bilateral relations and discussed ways to further strengthen cooperation in diverse areas including trade, regional connectivity and people-to-people exchanges. The Chief Adviser of Bangladesh appreciated Pakistan’s initiative to deepen engagement and highlighted the importance of enhancing bilateral trade and cultural linkages. The meeting was held in a cordial and friendly atmosphere, reflecting the mutual commitment of both countries to work together for the well being of their people and stability of South Asia.
