The Oil and Gas Development Company Limited (PSX: OGDC) has received the ninth installment of interest under Term Finance Certificates (TFCs) from Power Holding (Private) Limited (PHL), marking another step forward in the government’s ongoing efforts to address circular debt in Pakistan’s energy sector.
The receipt of this installment reflects steady and timely execution of the government’s structured repayment plan, which aims to stabilize the sector and restore confidence among investors and stakeholders.
Repayment Structure
As part of a government-approved mechanism to resolve the chronic circular debt issue affecting Pakistan’s energy industry, PHL is repaying a total interest amount of Rs92 billion in twelve equal monthly installments of Rs7.725 billion each. The repayment schedule commenced in July 2025, and the receipt of the ninth installment demonstrates consistent progress in the initiative.
| Aspect | Detail |
|---|---|
| Total Interest Amount | Rs92 billion |
| Installment Amount | Rs7.725 billion |
| Number of Installments | 12 equal monthly payments |
| Start Date | July 2025 |
| Current Installment | 9th of 12 |
| Beneficiary | Oil and Gas Development Company (OGDC) |
Circular Debt Context
Circular debt has long been a persistent challenge in Pakistan’s energy sector, creating a cascade of unpaid obligations among power generation companies, fuel suppliers, and distribution companies. The accumulation of unpaid dues has historically impacted the operational and financial health of energy sector entities, including exploration and production companies like OGDC.
The government’s structured repayment plan under which PHL is now making its ninth interest payment seeks to address this issue systematically. By ensuring that power sector entities meet their obligations to fuel suppliers and other stakeholders, the initiative aims to break the cycle of unpaid dues that has constrained the energy sector.
Impact on OGDC and the Sector
The continued timely payments by PHL highlight the effectiveness of the government’s mechanism in mitigating financial pressures in the energy sector while ensuring that OGDC receives its due interest under the TFC framework. For OGDC, these receipts provide:
- Improved liquidity position
- Enhanced ability to meet its own obligations
- Strengthened financial stability
- Support for ongoing exploration and production activities
The successful implementation of these installments could improve liquidity for both state-owned and private energy companies, potentially paving the way for long-term sectoral stability. As the repayment schedule continues, energy sector stakeholders will be watching for sustained progress toward resolving the circular debt challenge.
About Oil and Gas Development Company
Oil and Gas Development Company Limited (PSX: OGDC) is Pakistan’s largest exploration and production company, with a diverse portfolio of assets across the country. The company is majority-owned by the Government of Pakistan and plays a leading role in the nation’s energy sector.
About Power Holding (Private) Limited
Power Holding (Private) Limited (PHL) is a government-owned entity responsible for managing financial obligations in Pakistan’s power sector, including the issuance and servicing of Term Finance Certificates related to energy sector circular debt.
About Circular Debt
Circular debt in Pakistan’s energy sector refers to the accumulation of unpaid dues among power generation companies, fuel suppliers (including oil and gas companies), and distribution companies. The chain of unpaid obligations creates financial stress throughout the energy supply chain and has been a persistent challenge for the sector.
