Oil and Gas Development Company Limited has received another significant payment under the government’s circular debt reduction programme after Power Holding Private Limited transferred ₨7.725 billion as the eleventh monthly interest instalment. The payment forms part of an approved repayment mechanism linked to Term Finance Certificates designed to ease financial pressure across Pakistan’s struggling energy sector.
According to a notice submitted to the Pakistan Stock Exchange, the latest transfer represents continued progress under the government-backed circular debt settlement arrangement. OGDCL confirmed that the total interest amount of ₨92 billion is scheduled to be repaid through twelve equal monthly instalments beginning from July 2025. The company stated that the current payment reflects the eleventh instalment completed under the structured repayment plan.
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Furthermore, officials explained that the repayment mechanism was introduced to improve liquidity conditions for energy companies facing long-standing financial challenges caused by circular debt accumulation. Pakistan’s energy sector has struggled for years with delayed payments, rising operational costs and weak cash flow management, which have affected both state-owned and private energy companies operating across oil, gas and power industries nationwide.
The use of Term Finance Certificates under the repayment structure aims to provide a more organised and predictable method for clearing outstanding obligations within the sector. Analysts believe the consistent monthly payments may help strengthen investor confidence while improving the financial position of companies such as OGDCL. Stable cash inflows are also expected to support future operational planning and investment decisions in Pakistan’s energy market.
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Meanwhile, the government continues pursuing broader reforms intended to reduce the growing burden of circular debt, which remains one of the country’s biggest economic and energy sector challenges. Policymakers have repeatedly stressed the importance of timely payments, improved recoveries and stronger financial discipline to prevent further debt accumulation. The repayment programme involving Power Holding Private Limited represents one of several ongoing efforts aimed at stabilising the sector’s financial structure.
In recent years, OGDCL has remained one of Pakistan’s most important state-owned energy companies due to its large contribution to oil and gas production. The latest payment under the settlement mechanism provides additional financial support at a time when the country continues working toward economic stability and energy sector reforms. Market observers will now closely monitor the completion of the final instalment expected under the repayment arrangement.