Islamabad [Pakistan]: Bankrupt Pakistan’s debt problems seem to be getting worse as it is an all-time ally China has refused to restructure $ 3 billion in liabilities.
Islamabad has called on Beijing to write off debts owed to China-funded energy projects established under the China-Pakistan Economic Corridor (CPEC).
The debt burden, owed largely to building independent power generators (IPPs) on fixed-price power generation contracts, is significantly higher than the $ 19 billion total invested in power plants, Asia reported. Times citing reports and industry analysts.
Media reports suggest China has refused to budge on Islamabad’s demand to renegotiate power purchase agreements, saying any debt relief would force Chinese banks to change the terms and conditions under which the credits have been granted.
Banks, including the Development Bank of China and the Export and Import Bank of China, were not prepared to revise any of the terms of the earlier deal with the government, Beijing said in response to the request. renegotiation of terms.
Pakistani senator and industrialist Tehrik-e-Insaf (PTI) Nauman Wazir told Asia Times: âFirst, the tariff determined by the National Electric Power Regulatory Authority (NEPRA) when authorizing the production of electricity in the sector. private was very high. . “
“Then the PPIs submitted misrepresentations regarding the capital, financial assets and operating costs of the business, which became evident when the balance sheets of the PPIs were made public,” he said. citing evidence that came to light when a commission of inquiry into Pakistan’s power sector revealed its findings last year.
Pakistan has already entered a sovereign debt “danger zone” with total liabilities and debts of USD 294 billion representing 109% as a percentage of GDP as of December 30, 2020.
The Pakistani government owes about USD 158.9 billion to domestic creditors, of which about USD 15.1 billion goes to public sector companies. According to The News International, foreign commercial loans of $ 3.11 billion and $ 1 billion from Chinese deposits helped the government achieve the net transfer of inflows in the current fiscal year.
With the combination of foreign commercial loans and security deposits, Pakistan received more than US $ 4.1 billion, or more than 50 percent of the total inflows of foreign dollars received from creditors.
The media outlet reported that according to official data from the Economic Affairs Division (EAD), during July-February of fiscal year 2020-21, Imran Khan’s government received $ 7.208 billion in total external inflows. from multiple sources of funding, or 59 percent of the annual budget estimate of $ 12.233 billion for the full fiscal year 2020-2021.
The News International further reported; disbursements from multilateral and bilateral development partners also maintained a strong trend and stood at USD 3.098 billion during the period under review against the budget allocation of USD 5.811 billion for fiscal year 2020-2021 on concessional terms longer term. These healthy inflows have also helped improve foreign exchange reserves and exchange rate stability.
The Pakistani outlet says in its official report that the increase in the level of external inflows of multilateral and bilateral development partners is indicative of their confidence in the government’s development priorities and policies, including the implementation of reforms. in the priority areas of fiscal and debt management, energy sector and ease of doing business.
This story was posted from an agency feed with no text editing.
Never miss a story! Stay connected and informed with Mint. Download our app now !!