ISLAMABAD: The Finance Division has been mulling to issue interest-bearingbonds to reduce the power sector’s circular debt, Pakistan Today has learnt.
Sources privy to the matter disclosed that the finance ministry has beenconsidering a proposal which was floated by leading businessman MianMohammad Mansha during a meeting with Finance Advisor Dr Abdul HafeezShaikh last week.
Another power sector player, Shahzad Saleem, was also part of the meetingattended by Secretary Finance Naveed Kamran Baloch, State Bank of PakistanGovernor Dr Reza Baqir, Federal Board of Revenue Chairman Shabbar Zaidi andSpecial Secretary Finance Omar Hamid Khan.
As per details, the businessman gave a presentation to the participants tore-profile the circular debt that was mostly payable at present on ashort-term basis (fresh flow) and the medium-term (stock of circular debtparked with Power Holding Private Ltd – PHPL). The government team wasproposed that the flows and existing bonds could be extended to 25 yearsthrough bond swap at relatively higher returns.
Read Top Stories
This should ease immediate payment problems and the need for issuance ofsovereign guarantees. The bond swap proposal is in addition to an ongoingexercise to raise about Rs200 billion worth of Sukuk from local commercialbanks.
