With the government facing nearly Rs550 billion ($1.98 billion) in outstanding payments to Chinese Independent Power Producers (IPPs), there are plans to establish a payment schedule before the upcoming 13th Joint Coordination Committee (JCC) meeting of the China-Pakistan Economic Corridor (CPEC). This precedes an anticipated visit to Beijing by Prime Minister Shehbaz Sharif, slated for early June.
According to reports, the Chinese have requested that PM Sharif visits after the JCC meeting. This approach aims to resolve existing issues and craft a collaborative roadmap for the next phase of CPEC during the state-level discussion. While the visit is tentatively scheduled for the beginning of June, the date for the JCC meeting remains unconfirmed due to unresolved matters.
The focus of the Pakistani delegation, led by Planning Minister Ahsan Iqbal—who also co-chairs the JCC alongside his Chinese counterpart—is to settle all outstanding issues. Key among these are the resolution of the overdue payments to Chinese IPPs and ensuring future payments proceed smoothly, including those under the established revolving fund.
Reports indicate that the pending dues to Chinese power companies amount to approximately Rs550 billion, and there have been delays in the scheduled payments from the revolving fund in recent months.
Reports state that Chinese financial bodies are seeking reassurance for continued cooperation on crucial projects, underlining the need for confidence-building measures.
The delay in payments and China’s request for specific energy tariffs for Special Economic Zones (SEZs) have negatively impacted several major projects and investments within these zones.
In response, Planning Minister Ahsan Iqbal has conducted numerous meetings with relevant ministries and agencies. Recently, he chaired two significant meetings on a single Tuesday—one with about thirty-five representatives of Chinese businesses and another focusing on inter-ministerial and agency cooperation.
During the inaugural meeting of the Cabinet Committee on Chinese Investment Projects (CCoCIP), Iqbal discussed the pressing issues related to CPEC IPPs, which are crucial for the financial completion of key initiatives. An official statement quoted him urging the IPPs to promptly report their outstanding amounts related to CPEC energy projects.
The minister highlighted the necessity of supplying electricity to SEZs at a subsidized rate while ensuring the government remains financially sustainable. He has directed the board of directors of the power firms, especially the National Transmission and Dispatch Company, to swiftly address the issues related to SEZs.
Additionally, the minister also held a comprehensive meeting with 35 Chinese enterprises and Pakistani business entities to gather insights and suggestions on enhancing bilateral cooperation and capitalizing on shared opportunities.
He emphasized that the second phase of CPEC focuses on industrial cooperation and fostering business-to-business partnerships, building on the foundation established in the initial phase of the corridor.
