CPEC Power Projects badly hit by payment delays

China Export & Credit Insurance, Sinosure, has reportedly reluctant to accord approval to 1124-MW Kohala Hydropower Project in AJ&K, a project of CPEC. While owing to overdue payment of other CPEC projects in operation, the Government of Pakistan owes an amount of over Rs 300 billion to power projects established under the CPEC umbrella. The completed projects are in seek of help now from Chinese embassy in Islamabad for payments not cleared so far due to financial crunch which has also hiked circular debt to Rs 2.5 trillion. International Monetary Fund (IMF) and World Bank are urging Pakistani authorities to get relief in tariff from Chinese power projects on the pattern of other Independent Power Producers (IPPs). Recently, a meeting was held to review the progress of development activities and issues relating to 1124-MW Kohala Hydropower Project. That top-notch meeting was attended by representatives of stakeholders namely KHCL, GoAJ&K (Finance Department, Inland Revenue, Electricity Department/, Ministry of Energy (Power Division), NEPRA, CPPAG, CPEC Authority and PPIB. According to the highlights, all major issues have been resolved on part of the Government of Pakistan and the Government of AJ&K entities and now the Company should move ahead to achieve Financial Closing in a timely manner. Chief Executive Officer, Kohala Hydro Company (Pvt) Ltd. (KHCL) appreciated PPIB for organizing the meeting and requested for cooperation and facilitation for expediting the remaining ongoing activities.