Pakistan Secures $4.47 Billion Loan to Address Energy Debt

Pakistan has secured a significant loan of 1.25 trillion Pakistani rupees (approximately $4.47 billion) from commercial banks to address its persistent energy sector debt, a critical component of the ongoing $7 billion International Monetary Fund (IMF) bailout. The loan, repayable over 5 to 7 years at an interest rate below 11%, aims to restructure the circular debt caused by subsidies and delayed payments to Independent Power Producers (IPPs). With the government raising energy prices as recommended by the IMF, this financial strategy is intended to enhance efficiency, lower costs for consumers, and stabilize the country's economic framework. The restructuring plan is seen as a vital step for Prime Minister Shehbaz Sharif's administration towards sustainable economic reform and fulfilling international financial obligations. As part of this initiative, the government will also seek cooperation from IPPs to waive some interest charges, further alleviating the debt burden. Overall, these measures are expected to boost investor confidence and improve the financial health of Pakistan's energy sector.