Pakistan seeks restructuring of $3 billion from China

By Our Staff Reporter

Islamabad: In a bid to avoid increasing power tariff Pakistan may seek restructuring of $3 billion against the China-Pakistan Economic Corridor (CPEC) energy projects

It is worth mentioning that Pakistan has to pay nearly $3 billion to a dozen Chinese companies in three years.

“The government may request China to consider restructuring of the $3 billion repayments for 10 to 12 years, which in return will reduce the tariff increase requirements by Rs1.50 per unit,” Special Assistant to the PM on Power and Petroleum Tabish Gohar told journalists in Islamabad.

Government officials believe the initiative is part of the hosts of proposals that the PTI government is exploring to minimize tariff increase requirements estimated in the range of Rs4.60 to Rs5.65 per unit under a recently approved Circular Debt Management Plan.

China has set up 12 power plants under the CPEC and the repayments of the Chinese debt are included in the electricity tariffs. The consumers would pay them in rupees. However, the government would return them in dollars. Explaining the preposition, Gohar told journalists that Pakistan would request China to set up a one-time CPEC debt refinancing fund of $3 billion, which will be used to pay to the Chinese companies.

After 12 years, the government would recover the amount from the consumers to repay to China, he added.

“The proposal has been discussed with the Chinese ambassador to Pakistan and now it needs to be taken up at the highest level by both the countries. We do not want to embarrass our friend but the fact is that half of the IPPs’ payments are related to Chinese power projects,” Express Tribune quoted Tabish Gohar as saying.

The government had also earlier made an attempt to renegotiate the IPPs deals in light of the Mohammad Ali Inquiry Committee report, but China declined to reopen these deals, sources told The Express Tribune. The debt payments are due against Kohala hydropower project, Karot hydropower project, Suki Kinari power project, Port Qasim power project, Sahiwal power plant, Hubco power plant and Engro power generation project among others.

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