OGDC Receives Tenth Interest Payment Under Circular Debt Plan
Oil and Gas Development Company has received the tenth scheduled interest payment under Pakistan's circular debt resolution plan, marking continued progress in the government's structured effort to address chronic intercompany arrears that have long distorted the energy sector's financial integrity. The payment signals ongoing compliance with the settlement framework agreed between state energy entities and the government.
Circular debt — the accumulation of unpaid dues across the energy supply chain from generators and fuel suppliers to distribution companies — has been one of the most persistent structural vulnerabilities in Pakistan's economy. At its peak, the stock had grown to levels that threatened the operational viability of multiple state-owned energy enterprises.
The structured payment programme introduced as part of broader energy sector reform, partly in coordination with the IMF programme conditions, has sought to replace ad hoc settlements with a predictable, interest-bearing schedule. OGDC's consistent receipt of payments under this plan reflects some progress in normalising the financial flows.
However, analysts caution that resolving the interest liability is only one component of the broader circular debt challenge, which continues to accumulate in the power sector. A durable solution will require structural reforms to distribution company efficiency, billing recovery rates, and electricity tariff design rather than debt management alone.
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