Circular Debt and Excess Capacity: A Vicious Cycle

Circular Debt and Excess Capacity: A Vicious Cycle

Pakistan’s power sector is trapped in a cycle that grows more damaging with every new project added to the system. Circular debt keeps rising, electricity tariffs keep climbing and yet the country continues to build more power plants. Instead of fixing deep structural problems, policymakers are repeating the same mistake–adding capacity to a broken system. Nowhere is this failure clearer than in the energy plans linked to Gwadar, where grand ann…