Abdul Ghani

The total circular debt of Pakistan’s state-owned enterprises operating in the power and gas sectors declined during fiscal year 2025, with the combined stock falling to Rs3.93 trillion, according to the Federal State-Owned Enterprises Annual Aggregate Report FY2025.

The report shows that overall circular debt on a full accrual basis decreased from Rs4.52 trillion in FY2024 to Rs3.93 trillion in FY2025. Within the combined total, the power sector recorded a reduction in outstanding payables. Power-sector circular debt declined from Rs2.44 trillion in the previous fiscal year to Rs1.89 trillion during FY2025.

The report states that the decline was associated with fiscal support measures, including equity recapitalizations and balance-sheet adjustments of accumulated payables within distribution companies. In contrast, circular debt within the gas sector remained broadly stable. The stock stood at approximately Rs2.04 trillion in FY2025, compared with around Rs2.08 trillion recorded a year earlier.

The circular debt figures represent accumulated payment obligations across supply chains within the two sectors, including liabilities among generation companies, transmission entities, distribution companies and other related enterprises.

Alongside the circular debt data, the report provides financial indicators for the power sector during the fiscal year. Total revenues of power-sector SOEs were recorded at Rs3.87 trillion, compared with Rs4.05 trillion in the previous year. The sector posted combined losses of Rs242.7 billion during FY2025.

Balance sheet figures show that power-sector entities held total assets valued at Rs8.42 trillion, while total liabilities stood at Rs9.22 trillion. The difference resulted in negative equity of Rs800.5 billion for the sector.

The report also notes that government fiscal support to SOEs included significant equity injections during the year. Total equity injections across SOEs amounted to Rs728.9 billion, with a portion directed toward addressing financial positions and obligations in the power sector.

Overall liabilities of the SOE portfolio were recorded at Rs31.74 trillion at the end of FY2025, while total assets stood at Rs37.99 trillion. Total debt across all SOEs reached Rs9.57 trillion during the year.

The circular debt statistics form part of the federal government’s consolidated annual assessment of the financial position and operational performance of state-owned enterprises operating across sectors, including power, gas, oil and energy infrastructure.

The report presents these figures as part of its review of balance sheet exposures, liabilities and sectoral obligations for the fiscal year ended June 2025.

Credit: INP-WealthPk