Oil and Gas Development Company Limited (OGDC), Pakistan’s largest exploration and production firm, has confirmed receiving the third instalment of Rs7.73 billion as interest payment from Power Holding (Private) Limited (PHL). The transaction forms part of the government’s broader circular debt settlement plan designed to address persistent financial bottlenecks in the energy sector.
In a disclosure submitted to the Pakistan Stock Exchange (PSX) on Tuesday, OGDC stated that the payment is the third of twelve equal monthly instalments. Each instalment amounts to Rs7.725 billion and represents part of the agreed Rs92 billion in total interest repayments. The instalments began in July 2025, following government approval of a structured repayment mechanism aimed at stabilizing the finances of state-owned and private energy players.
According to the notice, OGDC underscored that the latest receipt reflects steady progress in implementing the circular debt settlement plan. This ongoing series of repayments, it added, reinforces the government’s commitment to gradually unwinding liabilities that have accumulated over years of inefficiencies in Pakistan’s power and energy sectors.
The company highlighted that it had previously received its second instalment of Rs7.73 billion in August, bringing the cumulative total of interest repayments so far to over Rs23 billion. The consistent disbursement of these payments is seen as a critical confidence-building measure for investors and stakeholders, many of whom have closely tracked the government’s ability to deliver on its circular debt promises.
The roots of the settlement plan go back to June of last year, when the government approved a payment of Rs82 billion to OGDC. That payout covered the principal value of the company’s investment in Privately Placed Term Finance Certificates (PPTFC) issued by Power Holding (Private) Limited. In parallel, the government also authorized the repayment of Rs92 billion in accumulated interest, to be cleared in equal instalments over twelve months starting in July 2025.
As part of the negotiated settlement, OGDC agreed to waive Rs72 billion in liquidated damages, following directives from the federal government. The waiver, although significant, was positioned as a necessary step to advance the larger restructuring of the circular debt and to prevent further strain on Pakistan’s already fragile energy supply chain.
Established in October 1997 under the Companies Ordinance, 1984 (now the Companies Act, 2017), OGDC has been a cornerstone of Pakistan’s energy landscape. Its origins trace back to the Oil and Gas Development Corporation founded in 1961. Since then, it has expanded its role in the exploration, development, production, and sale of oil and gas resources across the country.
The receipt of this third interest instalment marks another incremental yet crucial step in Pakistan’s effort to stabilize its energy sector finances. The government’s ability to maintain consistent repayments will be closely watched in the months ahead, as energy reforms and debt management remain critical to restoring investor confidence and ensuring the sustainability of power supply in the country.
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