CPEC: Pakistan debt liability to China stands at $6 billion only
ISLAMABAD - Ministry of Planning, Development and Reform clarified a news article regarding CPEC debt, published in a section of press on 26th December 2018.
The article is based on incorrect information, baseless assumptions and biased analysis. It is hereby clarified that China Pakistan Economic Corridor (CPEC) is a flagship and most active project of Belt and Road Initiative with CPEC finances comprises of Government to Government loans, Private investment and grants.
To date, 22 projects are progressing in various stages of implementation. Government of Pakistan financial liability is only to the tune of US $6 billion comprising of low interest loans and grants in infrastructure projects spread over 20 to 25 years payback period. Therefore, giving the impression US$ 40 Billion as liability on Pakistan is false, baseless and distorted.
The Energy projects are being executed purely under Independent Power Producers (IPPs) mode and finances are mainly taken by the private companies against their own balance sheets. Therefore, debt would be borne by the investors instead of any obligation on part of the Pakistani government.
The dividends of the energy sector projects are also based on profit and loss and are subject to individual company’s financing policies.