Pakistan PM Imran Khan, who has arrived in China on Thursday to attend the Beijing Winter Olympics 2022, aims to seek financial relief on Belt and Road debts, according to Asia Times. At the special invitation of the Chinese leadership, Khan is on a four-day visit to Beijing. He is scheduled to meet Chinese President Xi Jinping and other senior Chinese officials in Beijing where discussions will inevitably turn toward the $1.5 billion in overdue payments Pakistan owes Chinese energy companies that have built power plants as part of the China-Pakistan Economic Corridor (CPEC).
Notably, according to the media outlet, the Chinese-built power units may go into default if unpaid dues are not cleared soon, the CPEC authorities had warned earlier. Last week, during a meeting with the Pakistan PM, Chinese officials had even cautioned that Chinese Independent Power Producers (IPPs) may soon suspend their operations under Power Purchase Agreements following the rising prices of coal on international markets.
Asia Times reported that for China, CPEC is a part of a major strategic value in South Asia. However, the CPEC’s power plant component, which has seen the construction of several new electricity generating facilities in recent years, has bogged down the wider corridor amid perceptions in Pakistan that the financial terms of building and take-or-pay power contracts that require Islamabad to pay for power even if it is not delivered and transmitter are titled overwhelmingly to China’s advantage.
Pak eyes additional $3bn loan from China
Now, during his visit to Beijing, cash-strapped Pakistan is keeping its focus on availing a $3 billion loan from China and investments in half a dozen sectors. Islamabad also seeks an investment bonanza in half a dozen sectors, Express Tribune reported. Moreover, the Pakistani leader would also seek Chinese support in areas of finance, trade and investment.
A senior finance ministry official said the Imran Khan government was considering requesting China to approve another loan to the tune of $3 billion in China’s State Administration of Foreign Exchange, known as SAFE deposits, so as to boost its foreign exchange reserves.