Articles by Mushtaq Ghumman

Business

Cabinet directs PD to complete PHL winding up process

ISLAMABAD: The federal cabinet has directed the Power Division to complete all necessary formalities leading to the winding up of the Power Holding Limited (PHL) and submit an attendant timeline to the Economic Coordination Committee (ECC), sources told Business Recorder. These directions were issued by the ECC on November 7 while approving the issuance of the GoP guarantee amounting to Rs 659.6 billion for circular debt financing totaling Rs 1.225 trillion, which has been ratified by the Cabinet on November 12, 2025. The PHL is under the administrative control of the Ministry of Energy (Power Division) and is wholly owned by the Government of Pakistan. The company was established to reduce power sector liabilities through borrowings from financial institutions. The PHL is a not-for-profit entity registered under the Companies Ordinance, 1984. Power Holding Ltd approves early redemption of Rs400bn Pakistan Energy Sukuk The company was being used to borrow from banks on behalf of the power Distribution Companies (DISCOs) and pay interest to the banks on loans. Sharing the details, sources said, the Federal Cabinet approved an Indicative Term Sheet for CD Financing on June 18, 2025, for the settlement of the PHL debt and overdue payments to Independent Power Producers (IPPs). The Central Power Purchasing Agency-Guarantee (CPPA-G) is a Public sector entity and is responsible for arranging fresh facilities up to Rs 1.225 trillion. The financing and security agreements for circular debt financing amounting to Rs. 1.225 trillion were executed on October 3, 2025, between CPPA-G and various financial institutions. In terms of the Federal Cabinet’s approval and executed Financing Agreements, the first demand, irrevocable, unconditional and continuing Government of Pakistan’s Guarantee amounting to Rs. 659.646 billion (Guaranteed Principal Amount) is required to be issued by the Finance Division on behalf of the Government of Pakistan. The Guarantee shall replace the following earlier guarantees issued by the GoP in favor of the PHL loan of the same amount and will not affect any debt limitation of the GoP. Under the terms of the executed Financing Agreements, a Letter of Comfort was required to be initiated by the Finance Division upon the approval of the ECC. Security Agent (HBL) will accept Letter of Comfort as satisfactory compliance with the condition precedent to the first drawdown of the CD Financing. However, the Finance Division has been requested to issue the GoP Guarantee within 30 days of the first drawdown of the CD Financing. The Power Division, in its summary, had sought approval of the Government on the following proposals; (i) issuance of GoP guarantee amounting to Rs. 659.646 billion guaranteed principal amount by the Government of Pakistan; (ii) authorization to Finance Division to issue letter of comfort on an immediate basis; and (iii) authorization to Finance Division to issue GoP guarantee within 30 days of first drawdown under the executed Financing Agreements. According to sources, the proposal regarding winding up of the PHL came from the Finance Division, which was duly endorsed by the ECC and the federal cabinet. Copyright Business Recorder, 2025

Business

Third-party validation of subsidised tubewells: PD and QESCO at loggerheads over funds

ISLAMABAD: The Power Division and the Quetta Electric Supply Company (QESCO) are said to be at loggerheads over the release of funds for third-party validation of subsidized agricultural tubewells, as the distribution company has flagged several discrepancies in the consultant’s report. On October 28, 2025, the Power Division directed all DISCOs to release funds to ICore Business Solutions. In response, QESCO has submitted that, under Clause VI of the Memorandum of Understanding (MoU) signed between the Government of Pakistan (GoP) and the Government of Balochistan (GoB) regarding the solarization of agricultural tube wells (ATWs) in Balochistan, the GoB is responsible for engaging a consulting firm—upon clearance from the Steering Committee—for third-party verification of solarisation, grid disconnection, documentation and undertakings, and removal of transformers and fixtures by QESCO for each batch of feeders. The MoU further states that the cost of this service will be borne by the GoP and GoB in the agreed ratio, and that work on a subsequent batch may begin only after the third-party verification report confirms compliance for the preceding one. Poor performance of 3 Discos earns PD’s ire The GoB is also required to present the verification report for each batch before the Steering Committee during its monthly meeting or upon completion of that batch, whichever occurs first. Following this agreement, the GoB engaged ICore Business Solutions, which later shared three provisional field verification reports—Release-1, Release-2, and Release-3—with QESCO. However, sources claim that QESCO was neither consulted nor taken on board by ICore Business Solutions during the verification process. They contend that, contrary to the MoU’s requirements, the GoB has not presented verification reports for each feeder batch before the Steering Committee. Field checks by QESCO also revealed that the third party visited only a limited number of locations in Quetta and Pishin. Furthermore, QESCO identified several discrepancies in the three provisional reports (D1, D2, and D3). These concerns have been formally conveyed to ICore Business Solutions, with copies also forwarded to the Energy Department of the Government of Balochistan. QESCO maintains that it has still not received the complete and final third-party validation report. Copyright Business Recorder, 2025