Govt borrows Rs 170 billion from local banks for power sector circular debts

[Naveed Yaseen]

ISLAMABAD: The federal government is set to issue term finance certificates (TFC) – valued at Rs 89 billion – today (Saturday) to settle circular debts payable to power generation companies “once and for all”, said Finance Minister Shaukat Tareen on Friday.

The minister made the announcement while addressing the media after a meeting of the National Assembly Standing Committee on Finance. Tareen and Finance Secretary Salman Siddique said TFCs valued at Rs 80.7 billion had already been issued. They said that all the documentation was complete for the TFCs to be issued on Saturday, and 19 banks had agreed to provide Rs 89 billion in exchange for the certificates.

The interest rate for the TFCs would be KIBOR+200 points, to be taken on by the holding company established to deal with circular debts. This company would launch an offering, through the National Investment Trust (NIT), in the secondary debt market of the FTC loan. sajid chaudhry

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