Chinese condition for new loans to Pakistan for settlement of the energy projects

Engineering Post’s Report

A number of projects were under implementation in the energy sector of Pakistan with Chinese companies’ investment under the overall framework of the great game changer China-Pakistan Economic Corridor (CPEC) besides other sectors all over the country.

According to the sources close to the Federal Finance Ministry, China has now conditioned the provision of $ 600 million in new loans to Pakistan unless and until Pakistan makes a categorical commitment for settling the energy sector dues on priority basis. Chinese officials in softer tones have voiced their concerns regarding the non-fulfillment of the non-fulfilment of CPEC agreements, in particular highlighting the delays in energy sector payments.

With the ongoing financial strategy, Rs 48 billion were yearly with a monthly withdrawal of Rs 4 billion only which was in contrast with the 2015 Energy Framework Agreement which necessitates adequate funding allocation of for shielding investment of Chinese investors from the impacts of the circular debt as of February 2024 end, the power projects dues had accumulated quite obviously to an alarming of Rs 487 billion.