Circular debt

Last updated

In Pakistan, circular debt is a public debt which is a cascade of unpaid government subsidies, [1] which results in accumulation of debt on distribution companies. When this happens, the distribution companies cannot pay independent power producers who in turn, are unable to pay fuel-providing companies thus creating the debt effect as seen in the country. [2]

As of March 2024, the total circular debt of Pakistan was Rs. 3,000 billion. [3]

Related Research Articles

<span class="mw-page-title-main">Economy of Pakistan</span>

The economy of Pakistan is categorized as a developing economy. It ranks as the 24th-largest based on GDP using purchasing power parity (PPP) and the 46th largest in terms of nominal GDP. With a population of 232 million people as of 2023, Pakistan’s position at per capita income ranks 161st by GDP (nominal) and 138th by GDP (PPP) according to the International Monetary Fund (IMF).

<span class="mw-page-title-main">Pacific Gas and Electric Company</span> American utility company

The Pacific Gas and Electric Company (PG&E) is an American investor-owned utility (IOU). The company is headquartered at 300 Lakeside Drive, in Oakland, California. PG&E provides natural gas and electricity to 5.2 million households in the northern two-thirds of California, from Bakersfield and northern Santa Barbara County, almost to the Oregon and Nevada state lines.

<span class="mw-page-title-main">Scottish Power</span> British energy company

Scottish Power Limited is a vertically integrated energy company based in Glasgow, Scotland. It is a subsidiary of Spanish utility firm Iberdrola.

Eskom Hld SOC Ltd or Eskom (Afrikaans: Elektrisiteitsvoorsieningskommissie) is a South African electricity public utility. Eskom was established in 1923 as the Electricity Supply Commission (ESCOM). Eskom represents South Africa in the Southern African Power Pool. The utility is the largest producer of electricity in Africa, and was among the top utilities in the world in terms of generation capacity and sales. It is the largest of South Africa's state owned enterprises. Eskom operates a number of notable power stations, including Matimba Power Station and Medupi Power Station in Lephalale, Kusile Power Station in Witbank, Kendal Power Station, and Koeberg Nuclear Power Station in the Western Cape Province, the only nuclear power plant in Africa.

<span class="mw-page-title-main">Électricité de France</span> French multinational electric utility company

Électricité de France S.A., commonly known as EDF, is a French multinational electric utility company owned by the government of France. Headquartered in Paris, with €143.5 billion in revenues in 2022, EDF operates a diverse portfolio of at least 120 gigawatts of generation capacity in Europe, South America, North America, Asia, the Middle East, and Africa.

<span class="mw-page-title-main">Kostis Hatzidakis</span> Greek politician (born 1965)

Konstantinos (Kostis) Hatzidakis is a Greek politician of New Democracy who has been serving as Minister for Νational Economy and Finance in the Cabinet of Kyriakos Mitsotakis. Within his party, he serves as vice president under Mitsotakis' leadership.

<span class="mw-page-title-main">Israel Electric Corporation</span> Israeli electricity company

Israel Electric Corporation is the largest supplier of electrical power in Israel and the Palestinian territories. The IEC builds, maintains, and operates power generation stations, sub-stations, as well as transmission and distribution networks in Israel.

<span class="mw-page-title-main">Hub Power Company</span> Electric power company in Pakistan

Hub Power Company Limited, colloquially known as HUBCO, is the first and largest pakistan Independent Power Producer (IPP) with a combined installed power generation capacity of 3250 MW.

Electricity in Pakistan is generated, transmitted, distributed, and retail supplied by two vertically integrated public sector companies, Water and Power Development Authority (WAPDA) responsible for the production of hydroelectricity and supplied to the consumers by the power distribution companies (DISCOS) under the Pakistan Electric Power Company (PEPCO). Currently, there are 11 distribution companies and one National Transmission And Dispatch Company (NTDC) all in the public sector, and the Karachi Electric (K-Electric) for the city of Karachi and its surrounding areas. There are around 42 independent power producers (IPPs) that contribute significantly in electricity generation in Pakistan.

Umeme Limited is the largest energy distributor in Uganda, distributing about 97 percent of all electricity used in the country. The shares of the stock of the company are listed on the Uganda Securities Exchange (USE) and are cross listed on the Nairobi Stock Exchange (NSE). As of December 2021, the company's total assets were approximately UGX:2.664 trillion, with shareholders' equity of approximately UGX:893.15 billion.

<span class="mw-page-title-main">Energy policy of Pakistan</span>

The energy policy of Pakistan is formulated and determined by the federal, provincial, and local institutional entities in Pakistan, which address the issues of energy production, distribution, and consumption of energy, such as gas mileage and petroleum standards. Energy policy requires the proper legislation, international treaties, subsidies and incentives to investment, guidelines for energy conservation, taxation and other public policy techniques.

<span class="mw-page-title-main">Zong (mobile network)</span> Pakistani mobile network operator

CMPak Limited, doing business under brand name Zong, is a Pakistan based mobile data network operator, owned by China Mobile.

<span class="mw-page-title-main">F2i Fondi Italiani per le Infrastrutture SGR</span>

Fondi Italiani per le Infrastrutture SGR S.p.A. or, in short form, F2i SGR S.p.A., is Italy's largest independent infrastructure fund manager, with assets under management of approximately €7 billion. It currently manages five funds and one infrastructure Debt Fund.

Pakistan Textile City is located in Karachi, Sindh, Pakistan. Pakistan Textile City is an industrial zone dedicated to the textile processing and related industry. Established in 2009, with a total area of 1250 acres, the estate is located in the Eastern Industrial Zone of Port Qasim Karachi, 6 km from the National Highway.

<span class="mw-page-title-main">China–Pakistan Economic Corridor</span> Network of infrastructure projects

China–Pakistan Economic Corridor (CPEC) is a 3,000 km Chinese infrastructure network project in construction in Pakistan. This sea-and-land-based corridor is aimed to secure and reduce the passage for China's energy imports from the Middle East, by avoiding the existing route from the Straits of Malacca between Malaysia and Indonesia, which, in case of war could be blockaded, and thus hamper the Chinese energy-dependent economic avenues. Developing a deep water port at Gwadar in the Arabian Sea and a well built road and rail line from this port to Xinjiang region in western China would be a shortcut for boosting the trade between Europe and China. In Pakistan, it aims to overcome an electricity shortfall, infrastructural development and modernize transportation networks. Along with shifting it from an agricultural based economic structure to industrial based.

Palestine produces no oil or natural gas and is predominantly dependent on the Israel Electric Corporation (IEC) for electricity. According to UNCTAD, the Palestinian Territory "lies above sizeable reservoirs of oil and natural gas wealth" but "occupation continues to prevent Palestinians from developing their energy fields so as to exploit and benefit from such assets." In 2012, electricity available in West Bank and Gaza was 5,370 GW-hour, while the annual per capita consumption of electricity was 950 kWh. National sources only produce 445 GWh of electricity, supplying less than 10% of demand. The only domestic source of energy is the disputed Gaza Marine gas field, which has not yet been developed. Palestinian energy demand increased rapidly, increasing by 6.4% annually between 1999 and 2005. Future consumption of electricity is expected to reach 8,400 GWh by 2020 on the expectation that consumption will increase by 6% annually.

The Jerusalem District Electricity Company (JDECO), previously the Jerusalem Electric and Public Service Corporation, is a Palestinian electricity distribution company established in its current form in 1956 that has the exclusive rights to supply electricity to consumers in the districts of East Jerusalem, Bethlehem, Ramallah and Jericho. The company does not have its own power stations, but buys over 95% of its electricity from Israel Electric Corporation (IEC) and the remainder from Jordan Electric Power Company (JEPCO), which can only be used in the Jericho district. JDECO supplies electricity to 30% of households in the West Bank and East Jerusalem.

Afterpay Limited is an Australian financial technology company best known for its buy now, pay later (BNPL) service. It operates in Australia, the United Kingdom, Canada, the United States, and New Zealand. Afterpay was founded in 2014 by Nick Molnar and Anthony Eisen.

Debt-trap diplomacy is a term to describe an international financial relationship where a creditor country or institution extends debt to a borrowing nation partially, or solely, to increase the lender's political leverage. The creditor country is said to extend excessive credit to a debtor country with the intention of extracting economic or political concessions when the debtor country becomes unable to meet its repayment obligations. The conditions of the loans are often not publicized. The borrowed money commonly pays for contractors and materials sourced from the creditor country.

The national debt of Pakistan, or simply Pakistani debt, is the total public debt, or unpaid borrowed funds carried by the Government of Pakistan, which includes measurement as the face value of the currently outstanding treasury bills (T-bills) that have been issued by the federal government.

References

  1. The Conundrum of Circular Debt. Energy Law & Policy eJournal. Social Science Research Network (SSRN). Accessed 28 January 2020.
  2. "Lights out: 'Circular debt' cripples Pakistan's power sector". Al Jazeera.
  3. "PTI govt adds Rs565 billion to circular debt". The Express Tribune. 15 January 2020.