Oil & Gas Development Company Limited (OGDCL) has announced that it has received Rs. 7.725 billion as the fourth installment of its interest payment from Power Holding (Private) Limited (PHL), under the government’s ongoing circular debt settlement plan aimed at stabilizing Pakistan’s energy sector. The payment was confirmed through an official notice sent to both the Pakistan Stock Exchange (PSX) and the London Stock Exchange (LSE) on October 24, 2025.
The announcement marks another key milestone in the implementation of the government’s strategy to address the long-standing issue of circular debt that has weighed heavily on Pakistan’s energy supply chain and financial institutions. According to OGDCL, the Rs. 7.725 billion installment represents the fourth of twelve equal monthly payments being made by PHL as part of a structured repayment plan approved earlier this year.
The total interest amount under the plan stands at Rs. 92 billion, to be disbursed to OGDCL over twelve months. The repayment process began in July 2025, and with this latest tranche, the company has now received a cumulative Rs. 30.9 billion in interest payments to date. Each installment contributes to reducing the backlog of financial obligations that have historically disrupted liquidity and operational continuity within the energy and power ecosystem.
This repayment structure is part of the Government of Pakistan’s broader initiative to systematically address circular debt — a recurring challenge that has strained the country’s energy infrastructure for years. The mechanism was designed to ensure transparent, predictable cash flows to key energy sector entities while minimizing the fiscal burden through phased settlements.
The circular debt issue, primarily arising from delayed payments between power producers, distributors, and suppliers, has long been one of the biggest financial challenges in Pakistan’s energy economy. This latest payment underscores progress in the government’s commitment to restructure these financial linkages and restore stability across the energy value chain.
In its official communication, OGDCL reaffirmed its support for the government’s debt resolution program, stating that consistent disbursements from PHL are helping the company strengthen its liquidity position, maintain operational efficiency, and plan future investments with greater confidence. The timely release of payments also reinforces market confidence and highlights the government’s continued focus on restoring balance within the oil and gas sector.
Industry analysts view this development as a positive signal for investors and energy market stakeholders. The regularity of repayments demonstrates a functioning financial mechanism and indicates improved coordination between the Ministry of Energy, Power Holding (Private) Limited, and exploration and production companies like OGDCL.
As Pakistan continues to navigate economic pressures and energy supply challenges, OGDCL’s inclusion in the circular debt settlement process ensures stability for one of the country’s most critical state-owned enterprises. The company remains at the forefront of Pakistan’s oil and gas exploration and production efforts, playing a central role in meeting domestic energy demands while contributing significantly to the national exchequer.
Moving forward, the successful execution of the government’s debt settlement plan is expected to ease financial constraints across the sector, enabling better resource allocation and encouraging investment in energy infrastructure. OGDCL’s receipt of the fourth interest payment installment is, therefore, not just a financial update but a key indicator of progress toward a more sustainable and efficient energy ecosystem in Pakistan.
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