Circular debt

In Pakistan, circular debt is a public debt which is a cascade of unpaid government subsidies,[1] which results in accumulation of debt on distribution companies. When this happens, the distribution companies can't pay independent power producers who in turn, are unable to pay fuel providing companies thus creating the debt effect as prevalent in the country.[2]

As of December 2019, the total circular debt of Pakistan is ₨1,720 billion.[3]

References
  1. The Conundrum of Circular Debt. Energy Law & Policy eJournal. Social Science Research Network (SSRN). Accessed 28 January 2020.
  2. https://www.aljazeera.com/ajimpact/lights-circular-debt-cripples-pakistans-power-sector-190524055240222.html
  3. "PTI govt adds Rs565 billion to circular debt | The Express Tribune".
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