The government has offered a two trench plan to the Independent Power Projects (IPPs) for clearing circular debt. The government proposed giving one third cash and two third Pakistan Investment Bonds against the dues.
The offer was made in a meeting which was attended by the representatives of IPPs on Thursday evening, sources said. The government proposed that it will pay one third of the outstanding amount of circular debt in cash and two thirds outstanding amount in the form of PIBs at floating rates. The government proposed that this amount will be paid in two trenches; one will be paid in June 2021, and the final amount will be paid in December 2021, sources said. This way, the government will clear outstanding dues in one year.
The government owes above Rs 2 trillion of the different IPPs. Meanwhile, Pakistan State Oil (PSO) is owed Rs 196 billion by IPPs; it is also owed Rs 97 billion by Sui Northern Gas Pipeline, and Rs 20 billion by Pakistan International Airlines (PIA).
The next sessions of consultation will be held on Monday and Tuesday. They will be attended by the Federal Minister for Finance and Revenue Dr Abdul Hafeez Shaikh and representatives of IPPs.