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HomeFinanceECC Approves Rs. 57 Billion Forward Subsidy for K-Electric Arrears

ECC Approves Rs. 57 Billion Forward Subsidy for K-Electric Arrears

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On Wednesday, the Cabinet’s Economic Coordination Committee (ECC) approved an advance subsidy of Rs. 57 billion to settle K-Electric’s arrears. The ECC meeting was chaired by Dr. Shamshad Akhtar, the federal minister of finance. 

The committee authorized the technical supplemental grant to satisfy the operational needs of the power sector and reviewed a statement from the Ministry of Energy (Power Division) regarding the release of an advance subsidy of Rs. 57 billion for the payment of arrears to K-Electric.

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 The ECC was instructed to give Rs. 262.075 billion to public sector power plants through a technical supplementary grant after another summary of the Power Division regarding the settlement of payables to government-owned power plants (GPPs) at par with IPPs was authorized. The next meeting will address this topic in more detail.

As required by the IMF Standby Arrangement, the committee also decided to begin the phase-out of the State Bank of Pakistan’s Export Finance Scheme. ECC approved the release of Rs. 3.87 billion to EXIM bank for the current fiscal year to operationalize this obligation.

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During the September 19, 2023, discussion of the report on ECC’s decisions regarding PSM’s liabilities to GoP, the finance minister instructed the Ministry of Industries to conduct a diagnostic survey. The purpose of this survey was to ascertain why PSM’s liabilities continued to exist despite the company’s closure in 2015 and how PSM land was distributed to housing companies and utilized by other industries without following the proper procedures. On the PSM board, the ECC voiced its disapproval and suggested that the Industries Division investigate the matter to take any additional necessary steps.

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