Pakistan’s three major Capital Market Infrastructure Institutions (CMIIs) — the Pakistan Stock Exchange (PSX), National Clearing Company of Pakistan Limited (NCCPL), and Central Depository Company (CDC) — have approved a complete waiver of all fees, taxes, and margin requirements for transactions involving Pakistan Energy Sukuk (PES). The decision is aimed at directly supporting the federal government’s Rs1.225 trillion circular debt management strategy, which seeks a long-term resolution of Pakistan’s chronic power sector financial challenges.
The development was reported following the Boards’ approval in response to a detailed proposal presented by the market institutions. The move aligns with the government’s recently endorsed plan to clear circular debt by 2031, using a Shariah-compliant financing structure arranged through 18 participating banks. The plan includes sovereign guarantees worth Rs659.646 billion, approved last month as part of a comprehensive financing package.
In a formal communication to the PSX, CPPA-G Chief Executive Officer Rihan Akhtar confirmed that the federal government has backed a multi-year strategy focused on retiring existing liabilities through structured Islamic financing. He added that the aim is to stabilize the power sector by retiring expensive debt, improving liquidity, and ensuring timely payments to energy suppliers and independent power producers.
PSX CEO Farrukh H. Sabzwari stated that the CMIIs thoroughly reviewed the proposal and recognized the strategic importance of facilitating these Sukuk transactions. He emphasized that the PSX appreciates the government’s commitment to settling circular debt within a defined timeline and acknowledged the role of market institutions in enabling smooth execution. As a result, the Boards of PSX, NCCPL, and CDC approved the waiver of all margin requirements for Sukuk holders and CPPA-G, along with the elimination of all applicable transaction fees on PES buy and sell orders executed through the Negotiated Deal Market (NDM). According to PSX, this decision supports broader goals of economic stability and long-term financial reforms.
Under the financing plan, Rs1,225 billion will be secured at a pricing structure set at three-month KIBOR minus 0.9%, repayable over 24 equal instalments. Out of this amount, Rs660 billion is earmarked for retiring the debt owed by Power Holding Limited (PHL), while Rs565 billion will be directed to clear overdue payments to independent power producers (IPPs). The repayments will be funded through a Debt Service Surcharge under the NEPRA Act, ensuring predictable and structured cash flows.
The Shariah-compliant structure includes an Ijara Securitization through the Securitized Lease-Based (SLB) facility of up to Rs825 billion, backed by assets of distribution companies (DISCOs). In addition, a Bai-Muajjal financing facility of up to Rs400 billion is included. CPPA-G highlighted that timely execution of Bai-Muajjal is crucial due to limited available assets for collateralization.
As part of the transaction mechanism, CPPA-G, acting as an agent of the Investment Agent, is required to purchase Pakistan Energy Sukuk I and II from existing holders. After the purchase, these Sukuks will be redeemed, and CPPA-G will repay the acquisition value over 24 quarterly instalments. An estimated 99 percent of Sukuk holders have already given their consent for redemption.
The settlement will be facilitated through the PSX’s Negotiated Deal Market with a T+1 settlement cycle. CPPA-G stressed that without the approved waivers, the margin requirements and cumulative fees imposed by PSX, NCCPL, and CDC on Sukuks amounting to Rs400 billion would create substantial financial burdens for market participants. The approved exemptions therefore ensure cost-effective execution and reinforce support for the government’s circular debt resolution roadmap.
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