The government has approved payment of Rs82 billion ($233.17 million) to Oil and Gas Development Company Limited (OGDC), Pakistan’s largest E&P firm as part of the circular debt settlement plan. The development was shared by OGDC in a notice to the Pakistan Stock Exchange (PSX) on Thursday. “We are pleased to inform that, as part of the circular debt settlement plan, the Government of Pakistan (GoP) has approved payment of Rs82 billion to OGDC, representing the principal amount of the company’s investment in Privately Placed Term Finance Certificates (PPTFC) issued by Power Holding (Private) Limited (PHL),” read the statement. Further, the GoP has also approved repayment of interest of Rs92 billion in twelve equal installments commencing from July 2025, read the notice. OGDC shared that as part of settlement, the company has agreed to waive off Rs72 billion on account of liquidated damages on the directives of GoP. OGDC had subscribed to these certificates for settling its overdue receivables from oil refineries and gas companies. “The GoP’s initiative aimed at resolving the circular debt issue paves the way for sustainable growth and enhances shareholder value,” read the notice. Topline Securities, a brokerage house, in a note on Thursday said that the clearance of TFCs would further improve cash flow position of OGDC. “We believe, either these funds will be used for announcing dividends or will be diverted for the exploration activities or for the purpose of clearing any other pending payables,” it added. Managing Director/CEO Ahmed Hayat Lak, in a letter to Secretary Power Division, referred to the long outstanding overdue TFCs of Rs82 billion issued by PHL to OGDC in the year 2012 under a GoP backed partial settlement of circular debt. The TFCs bear a markup @KIBOR +1%, payable on six-monthly basis and in the case of delayed payment, Liquidated Damages (LDs) @ 20% p.a. is applicable. The tenure of TFCs was 7 years including 3 years’ grace period.