Pakistan to borrow in effort to repay $5bn electricity bill

from the Financial Times..

June 13, 2013, By Farhan Bokhari in Islamabad

Pakistan is to borrow more than $5bn to pay off the country’s outstanding electricity bill amid rising anger over power cuts that have exploded into violence in some cities.

Parts of Pakistan have remained without electricity for up to 20 hours a day this summer. According to the finance ministry, the shortages have caused annual losses equivalent to 2 per cent of GDP.

The move, by the new government of Prime Minister Nawaz Sharif, constitutes a gamble. The administration is looking for a quick-fix solution to ease the power crisis but some argue that by taking on more borrowing it will only lead to further debt problems in the longer term.

The government is to raise $5bn through the sale of government bonds to pay off the debt owed to the country’s private electricity producers as well as fuel suppliers…

Link to the entire article: http://www.ft.com/intl/cms/s/0/7ad51c68-d418-11e2-a464-00144feab7de.html#axzz2W6WD8zBB

 

 

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