As the mountain of Pakistan’s circular debt rises due to liquidity challenges and cash shortfall across the energy value chain and consequent non-payment to the power generators and fuel suppliers, the Government of Pakistan has been at its wit’s end to find a solution to the burgeoning problem. The sustained slow growth rate of electricity demand in the country, together with the rapid commissioning of new power plants (for example, the recent coming on line of K-2 nuclear plant and more to follow) implies that the capacity payment obligations that must be made regardless of electricity off-take will further rise…
