Banks refuse to lend further for circular debt reduction

ISLAMABAD: The caretaker government has failed to secure Rs50 billion in commercial financing for reducing the debt of energy companies as banks are reluctant to extend further credit because of heavy loans taken by the previous Pakistan Muslim League-Nawaz (PML-N) government.

In the last two months of its five-year tenure that ended at the end of May 2018, the PML-N administration borrowed Rs180 billion from banks to bring down debt levels in the energy chain for a smooth supply of electricity.

Apart from this, it also imposed surcharges on the honest power consumers that were paying their bills regularly in order to pay for the cost of inefficiency and electricity theft borne by power distribution companies.

Published in The Express Tribune, 24th July, 2018