ISLAMABAD: Pakistan has started considering the renewal of China’s energy loans.
Ahead of Prime Minister Shahbaz Sharif’s visit to Beijing, the government of Pakistan has made a proposal to renew China’s $15.4 billion energy sector loans with the aim of reducing electricity prices for consumers by Rs 3 per unit. According to executives involved in the preparation of the proposals, the proposals are aimed at paying off China’s debt over the long term, which will result in a gradual depletion of foreign exchange reserves as the $5.5 to $7.5 billion in energy debt is repaid every year. Payments come out of the country’s exchequer.
According to the sources, the government wants to increase the payment of Chinese loans for 21 projects in the energy sector by another 5 years. It will have to be paid in the interest of the loan, that is, by the end of 2040, China will pay a total of 16 billion 60 million dollars to Pakistan on these loans.
Sources said that these proposals have not yet been shared with China, nor is there any involvement of the International Monetary Fund. When the Ministry of Energy was contacted in this regard, no official response was received from there.
It should be noted that Prime Minister Shahbaz Sharif will visit China from July 4 to 7, where he will hold talks on issues of bilateral interest.
