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Pakistan in crisis: Circular debt also hits CPEC projects

Just Earth News | @justearthnews | 09 May 2021, 10:58 pm Print

Pakistan in crisis: Circular debt also hits CPEC projects Pakistan

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The China Pakistan Economic Corridor (CPEC) power projects have been affected by circular debt and the Pakistani government has not been able to clear Rs 188 billion due payments in breach of a bilateral energy framework agreement, media reports said.

Although the outstanding payments are only 18.4% of the billed amount, it has started affecting the financing models of the Chinese sponsors of the Independent Power Producers (IPPs), set up under the CPEC agreement, reports The Express Tribune.

“Pakistan has so far paid Rs 832 billion on account of power purchase price to the Chinese IPPs,” Special Assistant to Prime Minister on Energy Tabish Gohar told The Express Tribune.

Gohar also revealed to the newspaper that the Central Power Purchase Agency Guaranteed (CPPA-G) could not clear Rs188 billion worth dues.

The outstanding amount is only 18.4% of the total billed amount of Rs1.02 trillion, which is not a very large sum, he added.