Prime Minister Shehbaz Sharif on Thursday said that the International Monetary Fund (IMF) has pledged support to Pakistan amid the flood situation.
The remarks came during a ceremony where the Government of Pakistan (GoP) and a consortium of 18 banks signed Rs1.225 trillion financing facility agreements, which the prime minister attended virtually from New York.
The PM said he held an important meeting with IMF Managing Director Kristalina Georgieva on Wednesday, who lauded Pakistan’s economic reforms.
“Then she mentioned the flood situation in Pakistan, and the IMF chief was gracious to offer us significant space, saying that we are ready and will move forward together with you,” he said.
On Wednesday, PM Shehbaz Sharif met Georgieva on the sidelines of the 80th United Nations General Assembly session in New York to discuss Pakistan’s economic reforms and future cooperation.
During the meeting, the prime minister stressed that the “impact of the recent floods on Pakistan’s economy must be factored into the IMF’s review”.
An IMF team is set to visit Pakistan on September 25, 2025, for the second semi-annual review of the EFF. The review comes at a time when floods have ravaged the country, threatening fresh food inflation and creating deeper hardship in the cash-strapped South Asian nation.
Addressing the event on Thursday, PM Shehbaz said the circular debt had been consuming all resources and was continuously rising. “I believe that the way this issue was tackled is a major achievement.”
He said the Task Force on power worked diligently and held successful negotiations with independent power producers (IPPs), adding that the circular debt plan is the outcome of collective efforts.
The PM said that the next step is now the privatisation of distribution companies. Improving distribution lines and controlling line losses is a big challenge. In the next step, attention should be paid to the issue of line losses, he added.
Meanwhile, addressing the ceremony, Federal Minister for Energy Awais Leghari said the circular debt had put a huge burden on the economy and was adversely affecting the energy sector.
Leghari said that the circular debt resolution plan is not a scheme in isolation but a part of the government’s broader reform agenda.
“This initiative will strengthen the liquidity position of the power sector, and will send strong signals of fiscal discipline, investor confidence and reform commitment,” he said.
Under the scheme, Pakistan will get rid of circular debt within the next six years, Leghari said.
Commenting on this achievement, Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb, while addressing virtually, said that “this is the largest financing and restructuring transaction in the history of Pakistan”.
“This is a win-win situation.”
The finance minister said structural issues of the power sector are being resolved.
Earlier, the Ministry of Finance, in its statement, said that the government’s circular debt resolution plan will place no additional burden on power consumers, as repayments are set to be serviced through the already levied surcharge of Rs3.23 per unit.
