The government is set to hold a signing ceremony today for a financing facility agreement to reduce the circular debt in the power sector, according to the Prime Minister’s Office (PMO). A letter from the Central Power Purchasing Agency to all banks and power sector entities invited their chief executive officers and heads to attend the event. The public debt (including the IMF debt) increased to Rs80.5tr from Rs71.2tr in June 2024. Developments suggest that the government is negotiating with banks to borrow Rs1.2tr to settle the power sector’s circular debt. It was planned to borrow Rs1.275tr from banks as the government is willing to settle a portion of the circular debt, which has surged to Rs2.3tr.