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NO MONEY NO HELP: China Refuse to help Repaid Pakistani Hydropower Project | NewsRozana

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Islamabad: Bankrupt Pakistan & debt problems seem to be escalating as it is all weather-ally China has declined to restructure $3 billion in liability.

Islamabad has requested Beijing to forgive debt liabilities owed to China-funded energy projects established under the China-Pakistan Economic Corridor (CPEC).  

The debt load, mainly owed for building independent power producers (IPPs) on take-or-pay power generation contracts, is substantially more than the $19 billion in total invested in the plants, Asia Times reported citing reports and industry analysts.  

Media reports suggest that China has refused to budge on Islamabad’s request to renegotiate the power purchase agreements, saying that any debt relief would require Chinese banks to amend the terms and conditions under which the credits were extended.  

The banks, including the China Development Bank and the Export-Import Bank of China, were not prepared to revise any of the agreements reached earlier with the government, Beijing said in response to the request to renegotiate terms.  

Pakistan Tehrik-e-Insaf (PTI) Senator and industrialist Nauman Wazir told Asia Times, “First, the tariff determined by the National Electric Power Regulatory Authority (NEPRA) at the time of allowing power generation in the private sector was on the very high side.

Then, the IPPs submitted false declarations concerning capital, financial assets, and operational cost of the company, which became apparent when the balance sheets of the IPPs were made public,” he claimed, citing evidence that came to light when an inquiry committee on Pakistan’s power sector revealed its findings last year.  

Pakistan has already entered a sovereign debt” danger zone” with total liabilities and obligations of $294 billion, representing 109 percent as a percentage of GDP as of 30 December 2020.  

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