ISLAMABAD: China has reaffirmed strong resolve to extend financial support to Pakistan including early confirmation of two loans, i.e., from ICBC and CBC, as Pakistan has reverted its decision regarding shifting of Gwadar coal power projects from imported to local coal, well informed sources told Business Recorder.
This information was shared by Special Assistant to Prime Minister on Coordination, Syed Tariq Fatemi who along with SAPM on Power Zafaruddin Mahmood, Secretary to Prime Minister, Dr. Tauqeer Hussain Shah, Finance Minister, Ishaq Dar and Minister for Planning, Development and Special Initiatives, Ahsan Iqbal attended a breakfast meeting with the Prime Minister.
According to Syed Tariq Fatemi, as desired by the Prime Minister, he invited the Chinese Ambassador soon after conclusion of the Prime Minister’s breakfast meeting on January 4, 2023 to discuss the issue of two loans from Chinese commercial banks; SAPM Zafaruddin Mahmood was also present.
The meeting began by informing the Ambassador that the Prime Minister had taken a policy decision to go ahead with the Gwadar Power Project, as had been repeatedly requested by the Chinese Government. He expressed his profuse thanks to the Prime Minister, reiterating that this decision would be to our advantage, in the long run. He also shared that the Planning Minister had conveyed the same information to him.
The Government of Pakistan had finalized plan to shift Gwadar coal power plant from imported coal to Thar coal but Chinese government refused to accept the decision of GoP. However, when PM visited China, he was compelled to alter GoP’s decision. Recently, Chinese Foreign Ministry also sought written confirmation from the GoP that it will honour commitment given by the Prime Minister during his recent trip to China.
Chinese company CHIC Pak Power Company (Pvt.) Limited, in a letter to Managing Director PPIB stated that in response to the decision taken by the GoP, the company is keen to resume the financing activities on fast track and in order to achieve financial closing, the required permission or consents be cleared to expedite the project.
Prime Minister Shehbaz Sharif is also planning to undertake another official visit to China and seek further financial assistance from Beijing to deal with current financial woes of the country.
Fatemi also informed the Ambassador that the Prime Minister had taken note of Chinese concerns regarding IPPs payments and the alleged unfriendly attitude of the Power Division officials, adding that PM would soon be chairing an inter-ministerial meeting to deliberate on this matter.
The Ambassador then shared with both the SAPMs that he was worried that notwithstanding Pakistan’s decision, it may go back on it at some stage in the future. Consequently, he requested Power Division to confirm abandonment of the earlier view on the Gwadar Power Project and a firm policy decision in favour of it in this important port city.
SAPM Zafaruddin Mahmood added that the Chinese company should complete all necessary work at the earliest, including financial closure by December 31, 2023 to ensure that power plant starts generating electricity by December 2025; and to commence construction prior to completing financial closure.
SAPM Fatemi also reiterated Pakistan’s request for early confirmation of the two loans, one from ICBC and the other one from CBD. He also suggested that the Chinese government encourage the commercial banks to confirm refinancing of the loans, at the earliest.
In response, the Chinese Ambassador reaffirmed his government’s strong resolve to extend financial support to Pakistan. Chinese ambassador stated that loan from ICBC was in an advanced stage which would be approved “very soon.” He also stated that CBD’s technical team was already in Islamabad and meeting Pakistani officials to prepare a due diligence report. The final decision would be based on recommendations made in the report.
Chinese ambassador was advised by the aides to the Prime Minister to provide all additional information sought by CBD’s technical team.
Copyright Business Recorder, 2023