Cabinet Approves Historic Rs. 1.27 Trillion Power Sector Reform Plan
Shehbaz Sharif Praises Army Chief’s US Address at Federal Cabinet Meeting
Islamabad– The Federal Cabinet of Pakistan, under the chairmanship of Prime Minister Muhammad Shehbaz Sharif, convened at the Prime Minister House in Islamabad to review key national issues. The meeting was marked by the endorsement of a historic financial reform aimed at eliminating circular debt in the power sector and by high praise for the recent overseas engagement of Pakistan’s military leadership.
Opening the session, Prime Minister Shehbaz Sharif commended Field Marshal Syed Asim Munir, Chief of Army Staff, for his recent address to the Pakistani diaspora during his visit to the United States. The Prime Minister lauded the Field Marshal’s firm commitment to defending Pakistan’s borders and strategic interests and acknowledged the positive diplomatic impact of his outreach to overseas Pakistanis.
A major highlight of the session was the Cabinet’s formal approval of Pakistan’s largest-ever financial restructuring plan in the power sector, aimed at restoring financial stability and resolving the long-standing issue of circular debt. Under this initiative, Rs. 1,275 billion in circular debt will be addressed over the next six years without adding pressure to the national budget. The plan includes the refinancing of Rs. 683 billion for the Power Holding Company and the settlement of outstanding dues owed to Independent Power Producers (IPPs).
The Prime Minister described the decision as a significant breakthrough for the energy sector and the national economy. He emphasized that the reform reflects the government’s commitment to sustainable institutional change, fiscal responsibility, and restoring investor confidence in Pakistan’s power infrastructure.
In recognition of fiscal efforts, the Cabinet also extended appreciation to Federal Minister for Finance and Revenue Muhammad Aurangzeb and his economic team for presenting a “people-friendly” budget for the upcoming fiscal year. Additionally, Prime Minister Sharif paid tribute to Federal Minister for Religious Affairs Sardar Yousaf for the successful and well-organized arrangements during this year’s Hajj pilgrimage.
The Cabinet also made several other key decisions, including the appointment of Kamaluddin Tipu as Chairperson of the Commission for the Protection of Journalists and Media Professionals, following recommendations from the Ministry of Human Rights.
Furthermore, the Cabinet approved an exemption under Section 21 of the Pakistan Public Procurement Regulatory Authority (PPRA) Ordinance, 2002, allowing the National Power Parks Management Company Limited to procure various services for the acquisition of the Roush Power Plant.
Finally, the Cabinet ratified the decisions made during the Legislative Committee’s session held on May 21, 2025.
