CPEC loans: True facts and figures revealed

CPEC loans: True facts and figures revealed

ISLAMABAD - According to the breakdown of Chinese investments in Pakistan, 22 early harvest projects under CPEC have been completed or are under construction, with a total investment of $18.9 billion.

These projects aim at resolving two major bottlenecks hindering economic development of Pakistan, including lack of transportation infrastructure and energy shortage.

The Chinese government provided concessional loans of $5.874 billion for Pakistan government’s major transportation infrastructure projects, with a composite interest rate of around two per cent in a repayment period of 20-25 years. Meanwhile, the Pakistani government provides a sovereign guarantee for the above loans and will start the repayment from 2021.

“The Chinese companies and their partners invested $12.8 billion in energy projects in Pakistan. Among them, Chinese companies provided $3 billion from their own equity. The rest $9.8 billion is raised from commercial banks with an interest rate of about five per cent. The repayment period is 12-18 years. All the CPEC energy projects are an investment in nature, which is purely independent business behaviour of these companies,” the document read.

“The companies are responsible for their own profits and losses and repayment of loans. The Pakistani government does not repay these loans under CPEC . The business cooperation between the two sides is in full compliance with internationally accepted business practice,” the document stated further.

“The Chinese government provides interest-free loans for Expressway East Bay in Gwadar. Moreover, the Chinese government provides a grant for some livelihood 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 $5.874 billion and Category 3 $0.143 billion) and their interests to China”.

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