Oil and Gas Development Company Limited (OGDCL) has received a major payment of Rs 41.8 billion from Uch Power (Private) Limited, marking a significant breakthrough in Pakistan’s ongoing efforts to address circular debt in the energy sector. The payment represents long-outstanding receivables owed to OGDCL and is being hailed as a crucial step toward restoring financial stability across the energy supply chain.
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The company confirmed the receipt of funds through formal disclosures to the relevant regulatory bodies, noting that the inflow would substantially improve its liquidity position. With this settlement, OGDCL is better positioned to maintain smooth operational continuity, manage upcoming exploration and development activities, and reduce pressure on its cash flows that had been strained due to mounting receivables.
This development is closely aligned with the government’s broader circular-debt mitigation strategy, which aims to clear long-standing dues between power producers, fuel suppliers, and distribution companies. By settling its liabilities with OGDCL, Uch Power contributes to breaking the payment bottlenecks that have historically hampered electricity generation, slowed investment, and weakened sector-wide financial performance.
Industry analysts believe that such repayments can help build momentum for wider structural reforms, boosting investor confidence and demonstrating that the circular-debt resolution framework can yield tangible results. For OGDCL, the payment not only stabilises its balance sheet but also strengthens its ability to support critical energy projects without disruption.
This Rs 41.8 billion infusion is expected to enhance trust between upstream suppliers and power producers, enabling a more predictable and efficient financial ecosystem. As Pakistan works toward long-term energy sustainability, timely settlements of this scale signal a positive trajectory for the sector’s recovery, reduced fiscal stress, and renewed investor optimism.
