OGDC Receives Rs 7.7 Billion Under Government’s Circular Debt Settlement Plan

Oil and Gas Development Company Limited has received its seventh interest payment of Rs. 7.725 billion from Power Holding Private Limited under the Term Finance Certificates issued as part of the government-backed circular debt settlement plan. The payment forms part of a structured arrangement under which a total interest amount of Rs. 92 billion is being paid to OGDC in twelve equal monthly instalments, with the repayment process having commenced in July 2025.

According to OGDC, the latest payment was received through a mechanism approved by the Government of Pakistan, with Power Holding Private Limited designated to service the interest obligations on behalf of the state. This arrangement aims to address long-standing liquidity pressures caused by circular debt in Pakistan’s energy sector, which has historically been fueled by delayed payments, operational inefficiencies, and rising government liabilities.

Circular debt has remained a major challenge for the power and energy industry, limiting investment capacity and complicating financial planning for exploration and production companies. Under the approved settlement plan, regular monthly interest payments are providing much-needed cash flow support to OGDC, improving financial stability and enhancing visibility for future operations. As the country’s largest exploration and production company, the steady inflow of payments is expected to strengthen OGDC’s balance sheet and support ongoing energy sector reforms.