Pakistan has completed a record PKR 659.6 billion settlement of Power Holding Limited (PHL) debts, marking the largest transaction in the country’s debt capital markets, Federal Power Minister Sardar Awais Ahmed Khan Leghari announced Wednesday on social media.

The settlement includes a PKR 399.6 billion redemption of Pakistan Electric Supply (PES) I and II bonds through the National Depository Mechanism (NDM) via off-market transactions, along with PKR 259.7 billion cleared across several syndicated financing facilities.

Leghari said the NDM portion of the transaction reflects the “maturity and strength” of Pakistan’s capital markets and their ability to handle large-scale financial operations.

“This landmark transaction is a core component of the PKR 1,225 billion Circular Debt Reduction Plan,” he said. “It reflects strong institutional confidence in Pakistan’s ongoing economic reforms, government initiatives, and the depth of our capital and Islamic finance sectors.”

Experts say the move provides a major boost to an energy sector struggling with circular debt, liquidity shortages and inefficiencies. By redeeming PHL obligations and restructuring financing liabilities, officials aim to improve the financial stability of power distribution companies, bolster investor confidence and set the stage for broader reforms.

Leghari said the government remains committed to structural energy-sector changes and long-term fiscal stability. He said officials are working with stakeholders to accelerate growth driven by reforms and strengthen the country’s energy outlook.

Financial analysts view the PKR 659.6 billion settlement as a milestone that shows Pakistan’s capital markets can support large-scale debt operations, a key factor in maintaining liquidity and stability across the energy industry.

With the settlement finalized, Pakistan moves closer to reducing circular debt, strengthening institutional credibility and laying the foundation for sustained energy-sector reforms and economic growth.