Pakistan govt completes PHL settlements with ‘largest-ever debt market transaction’

Pakistan’s Power Division announced on Wednesday the completion of Rs659.6 billion Power Holding Limited (PHL) settlements, paving way for the winding up of the holding company.

“Alhamdolillah ! Delighted to announce the successful completion of Rs659.6 billion PHL settlements, comprising Rs399.6 billion redemption of PES I & II [Pakistan Energy Sukuk] executed through in Negotiated Deal Market/NDM (off-market transaction) through capital markets which is Pakistan’s largest-ever debt market transaction, alongside settlement of Rs259.7 billion in various syndicated financing facilities,” Power minister Sardar Awais Ahmed Khan Leghari said in a statement.

“The NDM part of this transaction is true reflection of strength of our capital market ecosystem and capability to handle large scale strategic financial operations.”

The minister said the transaction was a core component of the Rs1,225 billion Circular Debt Reduction Plan, “reflecting strong institutional confidence in Pakistan’s economic reforms, government initiatives and the depth of our capital and Islamic finance ecosystem”.

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The PHL is under the administrative control of the Ministry of Energy (Power Division) and is wholly owned by the Government of Pakistan. The company was established to reduce power sector liabilities through borrowings from financial institutions. The PHL is a not-for-profit entity registered under the Companies Ordinance, 1984.

The company was being used to borrow from banks on behalf of the power distribution companies (Discos) and pay interest to the banks on loans.

Last month, Business Recorder reported that the federal cabinet had directed the Power Division to complete all necessary formalities leading to the winding up of the PHL and submit an attendant timeline to the Economic Coordination Committee (ECC).

The directions were issued by the ECC on November 7 while approving the issuance of the Government of Pakistan (GoP) guarantee amounting to Rs659.6 billion for circular debt financing totaling Rs1.225 trillion, which was ratified by the Cabinet on November 12, 2025.

In a meeting held earlier this week with Ambassador Natalie Baker, Leghari sought US support in engaging US-based multilateral development partners and international financial institutions, including the IMF and the World Bank, to help remove obstacles hindering the sustainable growth of Pakistan’s power sector.

According to the Power minister, future electricity generation will be led by the private sector as the government will not procure power.