Dues payable to Chinese power plants have no connection with bailout deal, IMF told

Islamabad: Pakistan has assured the International Monetary Fund (IMF) that Pakistani Rs 493 billion dues payable to the Chinese power plants have no connection with IMF bailout deal.

The outstanding dues from power projects under the China-Pakistan Economic Corridor (CPEC) have surged to a significant Rs 493 billion or US $ 1.8 billion as of the end of January. This figure represents an alarming increase of Rs 214 billion or 77% compared to June of the previous year.

The visiting IMF team has raised questions regarding the effectiveness of the power sector’s anti-theft campaign, seeking clarity on the Pakistan government’s stance regarding the allocation of funds for Chinese power plants. The budgeted amount for this fiscal year stands at Rs 48 billion.

Officials said Pakistan had conveyed to the IMF that there is no plan to approve supplementary funds to clear the outstanding payments of the Chinese power plants.

Officials indicated that the IMF had expressed skepticism regarding the government’s anti-theft campaign’s long-term effectiveness and the military’s role in overseeing the performance of power distribution companies.

This development underscores Pakistan’s commitment to managing its financial obligations within the framework of existing agreements, ensuring that the China-Pakistan Economic Corridor (CPEC) remains an asset.

The assurance to the IMF reflects Pakistan’s determination to navigate its financial challenges responsibly while upholding its commitments to international partnerships such as CPEC.