Finance Minister Muhammad Aurangzeb ruled out the possibility of signing an energy debt restructuring agreement with China next week.
Speaking to journalists after attending a meeting of the Senate Standing Committee on Finance, Aurangzeb dismissed reports that an agreement for rescheduling Chinese energy debt was imminent.
Despite multiple media claims suggesting an upcoming memorandum of understanding (MoU) for debt re-profiling during the Chinese prime minister’s visit, the finance minister clarified that the process would take time.
Sources familiar with the negotiations stated that while China was open to discussions on debt re-profiling, there was nothing concrete in place at this stage to finalize terms.
Pakistan owes approximately $16 billion to Chinese financial institutions and has expressed interest in signing an MoU to explore debt re-profiling options. This would include the possibility of adjusting the base currency and interest rate, extending the loan tenor by five years, and instituting a three-year moratorium on principal payments.
However, the finance minister stressed that such an MoU would not lead to immediate relief. He emphasized that the re-profiling agreement could not be rushed, as it required the consent of multiple stakeholders, including lenders and sponsors.
