ISLAMABAD – According to the breakdown of Chinese investments in Pakistan,22 early harvest projects under CPEC have been completed or are underconstruction, with a total investment of $18.9 billion.
These projects aim at resolving two major bottlenecks hindering economicdevelopment of Pakistan, including lack of transportation infrastructureand energy shortage.
The Chinese government provided concessional loans of $5.874 billion forPakistan government’s major transportation infrastructure projects, with acomposite interest rate of around two per cent in a repayment period of20-25 years. Meanwhile, the Pakistani government provides a sovereignguarantee for the above loans and will start the repayment from 2021.
“The Chinese companies and their partners invested $12.8 billion in energyprojects in Pakistan. Among them, Chinese companies provided $3 billionfrom their own equity. The rest $9.8 billion is raised from commercialbanks with an interest rate of about five per cent. The repayment period is12-18 years. All the CPEC energy projects are an investment in nature,which is purely independent business behaviour of these companies,” thedocument read.
“The companies are responsible for their own profits and losses andrepayment of loans. The Pakistani government does not repay these loansunder CPEC. The business cooperation between the two sides is in fullcompliance with internationally accepted business practice,” the documentstated further.
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“The Chinese government provides interest-free loans for Expressway EastBay in Gwadar. Moreover, the Chinese government provides a grant for somelivelihood projects,” the documents further clarify.
About revival and upgradation of Pakistan’s Railway track also called ML-I,the Pakistani government has provided funding for the feasibility study.
“Therefore, Pakistan will repay only $6.017 billion (Category 1 $5.874billion and Category 3 $0.143 billion) and their interests to China”.
