Jcc Declines Plea For Chinese Ipps’ $15.4 Billion Debt: Implications For Energy And Investment

## JCC Rejects Request for Extending Chinese IPPs’ $15.4 Billion Debt Tenor

ISLAMABAD, May 25, 2024: The Joint Cooperation Committee (JCC) under the China-Pakistan Economic Corridor (CPEC) has declined a plea to extend the tenor of Chinese independent power producers’ (IPPs) $15.4 billion debt.

Despite receiving messages from the Chief Ministers of Sindh, Balochistan, and Khyber Pakhtunkhwa provinces expressing support for the extension, the request was not considered during the 13th JCC meeting held virtually on Friday.

The Ministry of Power had prepared and consulted on proposals to extend the debt tenor, but they were not presented at the meeting. Instead, both sides agreed to jointly explore the feasibility of converting electricity generation from imported coal to local coal to save $1 billion annually.

Chinese Investment in CPEC

The JCC was informed that China has invested over $17 billion in CPEC projects in Pakistan since 2014-15. The outstanding Chinese loan amount disbursed stands at $27.3 billion, while the total outstanding amount, including Chinese rollovers of deposits and commercial financing, is estimated at $35-$37 billion.

Progress on Key Projects

The JCC agreed to kickstart the construction of the Mainline (ML-1) rail line. The financing agreement will be finalized during Prime Minister Shehbaz Sharif’s visit to China in June 2024.

Additionally, three power projects with a combined capacity of 2100 MW will be completed: the 1800 MW Kohala and Azad Pattan hydropower projects, and the 300 MW Gwadar power project.

Other Agreements

Both countries also agreed to establish two joint working groups on water resources, climate change, and mining. On the security front, the government will raise a special division to safeguard Chinese personnel working on projects.

Repayment of Chinese IPPs’ Debt

Planning Minister Ahsan Iqbal stated that the government would repay the Rs 523 billion in outstanding circular debt owed to Chinese IPPs.