Energy projects under CPEC will not add debt burden on Pakistan

For some time now, speculations have been revolving in the market about the new projects being installed in Pakistan under China-Pakistan Economic Corridor (CPEC). The prevailing opinion is that the installation of these projects will ultimately prove to be a burden on the economy as all these projects are being established through loans which will need to be returned to China.

The Chinese Foreign Ministry’s Spokesperson while talking to the media last week disapproved all such rumours revolving in the market by explaining that power projects under China-Pakistan Economic Corridor (CPEC) have not incurred debt burden on the Pakistani side because they were investment projects.

“I can say this with good authority that these energy projects are commercial investment where Chinese companies invested in Pakistan. They do not incur debt burdens on the Pakistani side because they are investment projects,” Zhao Lijian said during his regular briefing in response to a question that Pakistan had requested China to reschedule their debts to the tune of around a US$22 billion in power projects which China has funded.

While further explaining the matter Zhao Lijian informed that he had worked in Pakistan for many years and he was very familiar with the energy projects and the CPEC. “So, these loans are from Chinese companies. The Pakistani government doesn’t need to pay back anything,” he added.

A total of 22 energy and power projects are planned to be constructed under the China-Pakistan Economic Corridor. So far, nine energy and power projects have been completed, which have contributed 5340 MW of electricity to the national grid.

Another eight energy projects are near completion and will pump in an additional 4470 MW of electricity to the national grid. Moreover, projects are in the planning and implementation phase till now.