Federal Cabinet Approves Landmark Financial Plan for Power Sector

The federal cabinet has sanctioned the largest financial initiative in the nation’s history, aimed at restoring stability to the power sector by addressing Rs1,275 billion in circular debt.

Prime Minister Shehbaz Sharif presided over the cabinet meeting at the Prime Minister’s House, where a series of significant decisions were endorsed, encompassing energy sector reforms, diplomatic acknowledgments, and institutional approvals, according to a statement from the Prime Minister’s Office.

The debt management strategy, formulated to reinstate financial health within the energy sector without straining the national budget, is projected to resolve Rs1,275 billion in circular debt over a six-year period.

The approved strategy incorporates refinancing Rs683 billion owed by the Power Holding Company and settling outstanding payments to Independent Power Producers (IPPs).

PM Shehbaz described the decision as a “pivotal step towards economic robustness and bolstering investor confidence in Pakistan’s energy domain.”

During the session, he stated, “This underscores our dedication to enduring institutional overhauls and alleviating fiscal pressures, thereby paving the way for a more secure and thriving energy landscape.”

The cabinet conveyed gratitude to Finance Minister Muhammad Aurangzeb and his economic team for presenting a budget that is favorable to the public for the upcoming fiscal year, recognizing their contributions to stabilizing the nation’s economy.

Regarding diplomacy, Premier Shehbaz commended Chief of Army Staff (COAS) Field Marshal Syed Asim Munir for his discourse with the Pakistani diaspora during his recent visit to the United States.

The prime minister lauded the army chief’s unwavering dedication to safeguarding Pakistan’s borders and interests, hailing it as a powerful demonstration of national determination.

Acknowledging the exceptional Hajj arrangements this year, the premier lauded Minister for Religious Affairs Sardar Yousaf, noting the well-organized pilgrimage as a testament to the government’s commitment to excellence in public service.

In other noteworthy decisions, the cabinet sanctioned the appointment of Kamal Uddin Tipu as Chairperson of the Commission for the Protection of Journalists and Media Professionals, based on the recommendation of the Ministry of Human Rights.

The cabinet also granted an exemption under Section 21 of the Public Procurement Regulatory Authority Ordinance, 2002, to the National Power Parks Management Company Limited (NPPMCL) for procurement activities related to the acquisition of the Rousch Power Plant.

Furthermore, the cabinet ratified the decisions made during the Cabinet Committee on Legislative Cases meeting held on May 21, 2025.