Options to settle power sector debt on the table for IMF policy talks

Consumers must brace for another hike in electricity tariff as the government was left with no other option but to receive additional payment from consumers to retire the power sector debt hovering at Rs1,000bn. This will be in addition to a slew of other measures, including removal of subsidies and other adjustments, to retire the debt. The move is part of the government’s actions to meet preconditions set by the International Monetary Fund (IMF) to resume the loan programme. The development came a day before the visiting IMF mission and the government were set to begin policy-level talks on Tuesday, after concluding extended technical consultations on Monday. Officials said the government has no option but to cover Rs952-1,000bn power sector circular debt through tariff measures as the IMF had made it clear that it was no longer acceptable to park the gaps in power holding companies.