Power projects prioritized in China-Pakistan Economic Corridor
By Li Shen
China and Pakistan are negotiating putting energy projects onto a fast track in the China-Pakistan Economic Corridor (CPEC), a long-term project which will make China the biggest investor in Pakistan.
Federal Minister for Planning, Development and Reforms Ahsan Iqbal briefs on Chinese projects of China-Pakistan Economic Corridor during a meeting with a Chinese media delegation in Islamabad on June 19, 2014. [By Li Shen/China.org.cn]
Pakistani Federal Minister for Planning, Development and Reforms Ahsan Iqbal briefs on Chinese projects of China-Pakistan Economic Corridor during a meeting with a Chinese media delegation in Islamabad on June 19, 2014. [By Li Shen/China.org.cn]
“We hope to reach an understanding with China’s National Development and Reform Commission (NDRC) during our meetings about how the projects are going to be financed and the timeline for the completion of the ‘early harvest’ projects.” Pakistani Federal Minister of Planning and Development Ahsan Iqbal told China.org.cn at a welcome ceremony held in Beijing on Monday.
The power projects are referred to as “early harvest” projects, and aim to relieve the acute power crisis in the country. “The huge power shortage has severely restricted the economic development of Pakistan,” Iqbal said. He hopes the major power projects can be launched within the year and can be completed by 2017. Before his departure for Beijing, Pakistani Prime Minister Nawaz Sharif approved a list of early harvest projects including power, roads, railways, the Gwadar port, and energy projects, worth a total of $35 billion.
Power projects include three power plants with a production of 20,000MW, transmission lines for evacuation of power; 1,000MW in Bahawalpur Solar Park and a 220MW renewable solar energy project near Karachi.
During his three-day stay in Beijing, Iqbal and his delegates have also held meetings with China Development Bank, Industrial and Commercial Bank of China (ICBC), EXIM Bank, National Energy Administration (NEA), and heads of other Chinese companies. He said those meetings helped in developing a roadmap for faster execution of CPEC projects, particularly with reference to their mode of financing.
According to Iqbal, the financing of the China-Pakistan Economic Corridor Project will be arranged project by project. All energy projects will be treated as IPPs (Independent Power Producers), and will be financed on a purely commercial basis due to generous returns. As for the infrastructure projects which are in the public interest, both sides will negotiate to include some concessional loans, in exchange for a long-term return. Iqbal also welcomes Chinese investment in public service projects like hospitals and technical training centers that show good will and corporate responsibility.
