Islamabad: To meet the IMF demand for circular debt reduction, the Caretaker Government is all set to release the outstanding dues of Rs 262.075 billion to the  Government Owned Power Plants (GPPs) during the next two quarters of the ongoing Fiscal Year 2023-24.

A summary submitted to Economic Coordination Committee (ECC) of the Cabinet by Power Division for the settlement of payables to Government owned Power Generation Plants at par with IPPs and release of Rs. 262.075 billion to these GPPs through Supplementary Grant, official documents available with The Nation reveals.The ECC is scheduled to meet here today(Wednesday)
The current circular debt is over Rs 2500 billion, and as per the commitment with IMF, the government will  keep it at the level of Rs 2310 billion during 2023-24.

As per the documents, the Power Division submitted a Summary for ECC of the Cabinet, dated 16th March 2022, to seek approval for clearance to past liabilities amounting to Rs. 444.5 billion in respect of Government Owned Power Plants (GPPs). A supplementary grant for release of Rs 182.465 billion for onward payment to Pakistan Atomic Energy Commission (PAEC), Water & Power Development Authority (WAPDA) and National Power Parks Management Company (NPPMCL), as per payment mechanism already approved for IPPs, was accordingly approved and subsequently released in FY22-23. 

Payments were made to the PAEC, WAPDA and NPPMCL, in accordance with ECC’s decision dated 30 March, 2022. For remaining payments of Rs.262.075 billion (as on 30.11.2020) to WAPDA and other GPPs, it was proposed that an exercise may be carried out for cash and non-cash settlement by Power Division, Finance Division and Economic Affairs Division. 

In CFY 2023-24, Rs. 262.075 billion have been allocated against Finance Division’s Demand No. 45, as lump sum provision for Power Subsidy. Finance Division has been taken on board and it has been agreed that out of Rs. 262.075 billion, an amount of Rs. 131.035 billion may be released in 2nd Quarter and remaining amount of Rs. 131.040 billion may be released in 3 Quarter of FY 2023-24. 

In view of the above, approval of Technical Supplementary Grant of Rs. 262.075 billion in Investment Head A014 under Power Division’s Demand No. 33 and release of the same as investment in DISCOs, is required. The said amount is to be distributed as under; - For 2nd Quarter, payment of Rs. 131.035 billion to Government Owned Power Plants GPPs (i.e. Rs. 26.782 billion to GENCO-II; Rs, 2.965 billion to GENCO-III, Rs. 83.638 billion to WAPDA; Rs.16.015 billion to Quaid-e-Azam Thermal Power (RLNG) and Rs. 1.635 billion to Quaid-e-Azam Solar Power. 

For 3" Quarter, payment of Rs. 131.040 billion to Government Owned Power Plants GPPs (i.e. Rs. 26.787 billion to GENCO-LI; Rs. 2.965 billion to GENCO-ILI, Rs. 83.638 billion to WAPDA; Rs.16.015 billion to Quaid-e-Azam Thermal Power (RLNG) and Rs. 1.635 billion to Quaid-e-Azam Solar Power.