Chinese firm reluctant to fund CPEC project citing due payments
May 16, 2022
Islamabad [Pakistan], May 16 : China Export and Credit Insurance company, also called Sinosure, one of the many Chinese companies that have invested in the China-Pakistan Economic Corridor (CPEC), has shown reluctance in funding a hydropower project citing due arrears from the Pakistani government, a media report said.
The Government of Pakistan owes an amount of over PKR 300 billion to power projects established under the CPEC umbrella, which are now seeking help from the Chinese embassy in Islamabad for payments not cleared so far due to the financial crunch which has also hiked the debt of the country to PKR 2.5 trillion, a Pakistani publication called Business Recorder reported.
A meeting was held to review the progress of development activities and issues relating to the 1124-MW Kohala Hydropower Project which was attended by various Pakistani stakeholders who discussed various issues relating to the project including the reluctance of Sinosure to fund the project, the report said citing sources.
Sponsors of the project stated that due to the overdue payment of other CPEC projects in operation, Sinosure is reluctant to issue its approval for the project, the report said.
The report further said that the sponsors are following up consistently with relevant departments of the Chinese government.
It was noted during the meeting that during the last apex visit of Pakistani officials in March 2022, the Sinosure issue was taken up with the Chinese side and it is expected that the issue will be resolved soon. However, if any further higher-level efforts are required that will also be made for materializing the project, the report said.
The meeting decided that the matter of Sinosure be taken up again at a higher level between the Government of Pakistan and the Government of China, the report further said.
"The meeting recognized that Sinosure is the only serious issue. PPIB and KHCL will put up a joint effort for early resolution through proper channels by engaging at higher levels of the GoP and Chinese government," the report quoted sources as saying.
In the past seven years, Pakistan has only been able to complete three China-Pakistan Economic Corridor (CPEC) projects in Gwadar while one-dozen schemes costing nearly USD 2 billion remain unfinished including those of water supply and electricity.
