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Pakistan, IMF discuss energy sector losses in virtual talks

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1 year ago

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  • Govt shares new Circular Debt Management Plan with IMF.
  • FPA and quarterly tariff adjustment to be revised upward.
  • IMF asks govt to chalk out effective strategy to tackle this issue.

ISLAMABAD: Pakistan and the International Monetary Fund (IMF) discussed the energy sector losses in the context of a cut in the circular debt during the current fiscal year in a virtual meeting on Wednesday, The News reported.

With the goal of eliminating the accumulation of circular debt, the government showed its commitment to adjusting the fuel prices and the quarterly tariff.

The government also shared a new Circular Debt Management Plan (CDMP) with the lender for which the baseline tariff was previously increased.

Now the fuel price adjustment (FPA) and quarterly tariff adjustment would be revised upward in order to reduce accumulation of the circular debt. The IMF team raised the issue of the sustainability of the CDMP as the pace of recoveries declined.

The government was asked to chalk out an effective strategy to tackle this issue. This meeting was held virtually at the technical level and it was expected that the newly inducted Minister for Finance Dr Shamshad Akhtar might hold a meeting with the IMF team virtually in the coming weeks.

The IMF mission is expected to hold the first review in October or November on the basis of official macroeconomic figures for the first quarter (July-Sept) period of the current fiscal year.

Pakistan and the IMF struck $3 billion bailout package under Standby Arrangement (SBA) in July 2023, out of which Islamabad so far secured $1.2 billion as upfront installment.

Now, two reviews would be done to release the remaining $1.8 billion till the end of March/April 2024.

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Business

Irfan Siddiqui meets with the PM and informs him about the Senate performance of the parliamentary party.

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2 days ago

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The head of the Senate’s Foreign Affairs Standing Committee and the PML-N’s parliamentary leader paid Prime Minister Muhammad Shehbaz Sharif a visit in Islamabad.

Senator Irfan Siddiqui gave the Prime Minister an update on the Parliamentary Party’s Senate performance.

Additionally, Senator Irfan Siddiqui gave the Prime Minister an update on the Senate Standing Committee on Foreign Affairs’ performance.

He complimented the Prime Minister on his outstanding efforts to bring Pakistan’s economy back on track and meet its economic objectives.

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Business

SIFC Increases Direct Foreign Investment: Investment in the Energy Sector Rises by 120%

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The Special Investment Facilitation Council is intended to help Pakistan’s energy sector attract $585.6 million in direct foreign investment in 2024–2025. The amount invested at the same time previous year was $266.3 million.

This is a notable 120% rise, mostly due to investments in gas exploration, oil, and power. Such expansion indicates heightened investor confidence and emphasizes the development potential in important areas.

The State Bank reports that foreign investment in other vital industries has increased by 48% to $771 million.

This advancement is a blatant testament to SIFC’s efficient investment procedure and quick project execution.

The purpose of the Special Investment Facilitation Council is to establish Pakistan as an investment hub by aggressively promoting regional trade and investment in the energy sector and other critical industries.

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Business

Discos report losses of Rs239 billion.

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2 days ago

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When compared to the same period last year, the data indicates that discos have decreased their losses in the first quarter of the current fiscal year.

The distribution businesses recorded losses of Rs239 billion in the first three months of the current fiscal year, a substantial decrease from the Rs308 billion losses sustained during the same period the previous year.

Additionally, the distribution businesses’ rate of recovery has improved. It has increased to 91% in the first quarter of this year from 84% in the same period last year, indicating success in revenue collection.

Regarding circular debt, the Power division observed a notable change. Last year, between July and October, the circular debt grew by Rs301 billion. Nonetheless, this year’s first four months saw a relatively modest increase in circular debt, totaling about Rs11 billion.

These enhancements show promising developments in the electricity sector’s financial health in Pakistan, where initiatives are being made to accelerate recovery rates and slow the expansion of circular debt.

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