he Asian Development Bank (ADB) has stated that it may increase its credit line to Pakistan from $500 million to $1 billion to help Pakistan Electric Power Company (Pakistan Electric Power) wriggle out from the circular debt in the power segment, a senior official at the ministry of water and power stated to The News. At LIBOR+150 to 200 basis points, Pakistan is pursuing the loan from ADB. If the loan is granted, some amount will be used by the government to eliminate the entire circular debt.
The senior official said “We have approached World Bank and ADB for loan to erase by June 30, 2009 the remaining part of the circular debt which stands at over Rs100 billion, as the incumbent regime had generated Rs92 billion through Terms Finance Certificates. Once the whole circular debt gets cleared the smooth functioning of the power sector will be ensured.”
The government seeks to eliminate the entire circular debt by June 30, 2009, which is why the ministry for water and power is in negotiations with ADB.
For more on this article, please click on the following link: ADB May Increase Credit Line To Pakistan Electric Power To Resolve Circular Debt: Energy Business Review
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