Pakistan to Seek Debt Relief From China Belt and Road Loan: Bloomberg

[Patriot forever]

How conveniently they ignore IPPs installed in Pakistan from 2008 in PPP government and not a SINGLE IPP was Chinese financed project during that period

People should recall the Term "Raja Rental"

Sir I am one of most pro China guys on this forum but the article says is not entirely wrong.

The cost of power production is 12.3 rupees/kwh, capacity payments is on top. Couple that with our line losses.

The agreements signed on behalf of these projects are so unfavourable that our industries can not afford it as this would render them uncompetitive. To add further the capacity installed far exceeds our needs ( projects should have been built over a period of time so that demand remained consistent with generation). Since we are forced to pay for capacity this has turned out to be counter productive.

The whole idea behind it was that power should be made available to allow our industries to expand and promote industries to move to Pakistan to take advantage of our cheap labour. Now our industries are not willing to let go of in house captive power plants as grid electricity is expensive.

https://twitter.com/x/status/1355118122819350529

 

[Vanamali]

Congratulations Pak for achieving surplus... Now load shedding will not be there, companies can work without hinderance...
It can sell power to its neighbours also.

 

[Muhammad Omar]

Pakistan to Seek Debt Relief From China Belt and Road Loan
By
Faseeh Mangi
February 9, 2021

• China-financed power plants in Pakistan resulted in oversupply
• Relief part of Pakistan’s plan to reduce power payments

Pakistan plans to ask China for relief on payments for power projects Beijing financed over the past eight years, the latest developing nation that’s struggling to repay debt under President Xi Jinping’s Belt and Road Initiative.

In informal talks, Pakistan and China have discussed easing terms on the repayment of debt on about a dozen power plants, according to a person with knowledge of the matter, who said Islamabad hasn’t made a formal request yet. The parties have canvassed Beijing’s willingness to stagger debt payments, as opposed to lowering equity returns, the person said, requesting anonymity as the plan is private.


An enormous build-out of Chinese-financed power plants in Pakistan, which was originally intended to solve its electricity shortages, has resulted in a surplus that Islamabad isn’t able to afford. Infrastructure projects funded by China’s initiative in other developing nations, such as Sri Lanka and Malaysia, have suffered issues ranging from heavy debt loads to corruption.

A spokesperson at China’s Ministry of Foreign Affairs said they aren’t aware of Pakistan’s plan to seek debt relief.

“Energy projects have provided Pakistan with a large amount of stable and low-priced electricity, effectively reducing the overall price of electricity in Pakistan,” the spokesperson said in a written response. “China-Pakistan energy cooperation has progressed smoothly and brought about real economic and social benefits.”


Pakistan’s power division didn’t respond to a request seeking comment.

China has previously denied U.S. criticism that the initiative leads to debt traps, while acknowledging that countries have had difficulties repaying loans due to the pandemic-induced global recession. Last year, Beijing canceled interest-free loans to 15 African countries due to mature by the end of 2020, and it has delayed other payments.

The Belt and Road program had found new life in Pakistan last year with the signing of $11 billion worth of projects, most of which went to revamping the nation’s railway system.


While Chinese financing has helped Pakistan diversify fuel supplies, it has also resulted in a surplus of electricity, which is problematic for the government in Islamabad because it is the sole buyer and pays producers even when they don’t generate. To help tackle the issue, the government has negotiated with power plants, which produce roughly half of its electricity, to lower rates.

Pakistan will formally make the request to defer debt payments to China, as well as other plants that were part of the latest power policy, after it concludes deals with those local power producers to reduce electricity tariffs, said the person with knowledge of the matter. Debt relief from China will also help the government reduce power payments.

— With assistance by Lucille Liu, and Jing Zhao
---

Happy now are we? Where is game changer CPEC?

@Horus @waz @TaiShang @muhammadhafeezmalik @Mav3rick @Muhammad Omar @Joe Shearer @ziaulislam @Path-Finder @PakSword @Patriot forever @Black.Mamba @Indus Pakistan @koolio @Morpheus @beijingwalker

Pehle article to parh lein bhai sahab headline parh k copy paste

Islamabad hasn’t made a formal request yet.

spokesperson at China’s Ministry of Foreign Affairs said they aren’t aware of Pakistan’s plan to seek debt relief.

Pakistan’s power division didn’t respond to a request seeking comment.

China has previously denied U.S. criticism that the initiative leads to debt traps, while acknowledging that countries have had difficulties repaying loans due to the pandemic-induced global recession


Now game changer part

The Belt and Road program had found new life in Pakistan last year with the signing of $11 billion worth of projects, most of which went to revamping the nation’s railway system.

Chinese financing has helped Pakistan diversify fuel supplies,

Why they are doing this???

Pakistan will formally make the request to defer debt payments to China, as well as other plants that were part of the latest power policy, after it concludes deals with those local power producers to reduce electricity tariffs

 

[Path-Finder]

Pakistan to Seek Debt Relief From China Belt and Road Loan
By
Faseeh Mangi
February 9, 2021

• China-financed power plants in Pakistan resulted in oversupply
• Relief part of Pakistan’s plan to reduce power payments

Pakistan plans to ask China for relief on payments for power projects Beijing financed over the past eight years, the latest developing nation that’s struggling to repay debt under President Xi Jinping’s Belt and Road Initiative.

In informal talks, Pakistan and China have discussed easing terms on the repayment of debt on about a dozen power plants, according to a person with knowledge of the matter, who said Islamabad hasn’t made a formal request yet. The parties have canvassed Beijing’s willingness to stagger debt payments, as opposed to lowering equity returns, the person said, requesting anonymity as the plan is private.


An enormous build-out of Chinese-financed power plants in Pakistan, which was originally intended to solve its electricity shortages, has resulted in a surplus that Islamabad isn’t able to afford. Infrastructure projects funded by China’s initiative in other developing nations, such as Sri Lanka and Malaysia, have suffered issues ranging from heavy debt loads to corruption.

A spokesperson at China’s Ministry of Foreign Affairs said they aren’t aware of Pakistan’s plan to seek debt relief.

“Energy projects have provided Pakistan with a large amount of stable and low-priced electricity, effectively reducing the overall price of electricity in Pakistan,” the spokesperson said in a written response. “China-Pakistan energy cooperation has progressed smoothly and brought about real economic and social benefits.”


Pakistan’s power division didn’t respond to a request seeking comment.

China has previously denied U.S. criticism that the initiative leads to debt traps, while acknowledging that countries have had difficulties repaying loans due to the pandemic-induced global recession. Last year, Beijing canceled interest-free loans to 15 African countries due to mature by the end of 2020, and it has delayed other payments.

The Belt and Road program had found new life in Pakistan last year with the signing of $11 billion worth of projects, most of which went to revamping the nation’s railway system.


While Chinese financing has helped Pakistan diversify fuel supplies, it has also resulted in a surplus of electricity, which is problematic for the government in Islamabad because it is the sole buyer and pays producers even when they don’t generate. To help tackle the issue, the government has negotiated with power plants, which produce roughly half of its electricity, to lower rates.

Pakistan will formally make the request to defer debt payments to China, as well as other plants that were part of the latest power policy, after it concludes deals with those local power producers to reduce electricity tariffs, said the person with knowledge of the matter. Debt relief from China will also help the government reduce power payments.

— With assistance by Lucille Liu, and Jing Zhao
---

Happy now are we? Where is game changer CPEC?

@Horus @waz @TaiShang @muhammadhafeezmalik @Mav3rick @Muhammad Omar @Joe Shearer @ziaulislam @Path-Finder @PakSword @Patriot forever @Black.Mamba @Indus Pakistan @koolio @Morpheus @beijingwalker

pleaj stop poshting fake newj.

 

[HRK]

Why did govt rushed through so many projects with so much high returns without spending anything on distribution and fixing the real problem..the price

Commission and Corruption

We lost industry due to cost of power rather then non availability of power

During PPP government 12 to 16 hour load shading was a norm in Punjab when PML-N formed the government in 2013 they did the same with Sindh .... so both reason were valid

 

[Indos]

Over capacity is actually good, it shows industry can just open factories there since there will be no worry about the electricity supply. In Indonesia, Java and Bali has oversupply electricity as well.

Maybe there is something different with the Pakistan-China agreement, or maybe since our state owned electricity company also has many power plants, so if over supply happen, they just need to buy electricity from the private owned power plants while the ones that they own will just reduce the operation or shut down for some time until demand pick up again.

 

[fitpOsitive]

Pakistan to Seek Debt Relief From China Belt and Road Loan
By
Faseeh Mangi
February 9, 2021

• China-financed power plants in Pakistan resulted in oversupply
• Relief part of Pakistan’s plan to reduce power payments

Pakistan plans to ask China for relief on payments for power projects Beijing financed over the past eight years, the latest developing nation that’s struggling to repay debt under President Xi Jinping’s Belt and Road Initiative.

In informal talks, Pakistan and China have discussed easing terms on the repayment of debt on about a dozen power plants, according to a person with knowledge of the matter, who said Islamabad hasn’t made a formal request yet. The parties have canvassed Beijing’s willingness to stagger debt payments, as opposed to lowering equity returns, the person said, requesting anonymity as the plan is private.


An enormous build-out of Chinese-financed power plants in Pakistan, which was originally intended to solve its electricity shortages, has resulted in a surplus that Islamabad isn’t able to afford. Infrastructure projects funded by China’s initiative in other developing nations, such as Sri Lanka and Malaysia, have suffered issues ranging from heavy debt loads to corruption.

A spokesperson at China’s Ministry of Foreign Affairs said they aren’t aware of Pakistan’s plan to seek debt relief.

“Energy projects have provided Pakistan with a large amount of stable and low-priced electricity, effectively reducing the overall price of electricity in Pakistan,” the spokesperson said in a written response. “China-Pakistan energy cooperation has progressed smoothly and brought about real economic and social benefits.”


Pakistan’s power division didn’t respond to a request seeking comment.

China has previously denied U.S. criticism that the initiative leads to debt traps, while acknowledging that countries have had difficulties repaying loans due to the pandemic-induced global recession. Last year, Beijing canceled interest-free loans to 15 African countries due to mature by the end of 2020, and it has delayed other payments.

The Belt and Road program had found new life in Pakistan last year with the signing of $11 billion worth of projects, most of which went to revamping the nation’s railway system.


While Chinese financing has helped Pakistan diversify fuel supplies, it has also resulted in a surplus of electricity, which is problematic for the government in Islamabad because it is the sole buyer and pays producers even when they don’t generate. To help tackle the issue, the government has negotiated with power plants, which produce roughly half of its electricity, to lower rates.

Pakistan will formally make the request to defer debt payments to China, as well as other plants that were part of the latest power policy, after it concludes deals with those local power producers to reduce electricity tariffs, said the person with knowledge of the matter. Debt relief from China will also help the government reduce power payments.

— With assistance by Lucille Liu, and Jing Zhao
---

Happy now are we? Where is game changer CPEC?

@Horus @waz @TaiShang @muhammadhafeezmalik @Mav3rick @Muhammad Omar @Joe Shearer @ziaulislam @Path-Finder @PakSword @Patriot forever @Black.Mamba @Indus Pakistan @koolio @Morpheus @beijingwalker

Russias entry in CPEC is a must now.

 

[maverick1977]

Faseeh Mangi, he writes for Bloomberg and a lot of other indian newspapers too...

Articles by Faseeh Mangi | Bloomberg News Journalist | Muck Rack

Articles by Faseeh Mangi on Muck Rack. Find Faseeh Mangi's email address, contact information, LinkedIn, Twitter, other social media and more.

muckrack.com

 

[fitpOsitive]

Commission and Corruption

During PPP government 12 to 16 hour load shading was a norm in Punjab when PML-N formed the government in 2013 they did the same with Sindh .... so both reason were valid

That's the thing. No one thinks about Pakistan. It's all either Sindh or punjab or kpk or Balochistan.
Rul gaey log is zalalat ki wajah se... Kch thek se nai hopata.

 

[HRK]

The cost of power production is 12.3 rupees/kwh, capacity payments is on top. Couple that with our line losses.

Since we are forced to pay for capacity this has turned out to be counter productive.

bhai its not about pro-China or anti China debate we all know the policy of IPPs were first introduce in PPP second government Habco is the example of that era .... but in 2008 when PPP formed government third time it reintroduce the policy and most of the IPPs installed in that era were granted licences to local investors Minsha group and others. This Policy of Capacity Payment was introduced in that ERA and later adopted by PML-N government as Industry Standard
plz here recall the Karkey Scandal as well, It is believe in some circle believe that Capacity payment was a way to get commissions on perpetual basis by the people in power and IPPs were also getting benefiting with this policy

Chinese companies joined IPP industry in Pakistan during PMN-N government and other than financing structure they adopted the 'Industry Standard', so my point is

Why target only Chinese Investment why not question other investors .... who are the bigger beneficiaries of this policy .....???

Power Sector and LNG are the 2 biggest corruption scandals of Pakistan history

It's all either Sindh or punjab or kpk or Balochistan.

Its not even about Sindh or Punjab its about their Political Power base just tell me what PMLN did for Punjab other then some highly visible project in a particular city of Punjab ..... ????

What PPP have done for Sindh or for Sindhi people .... ???

they do not even care about Larkhana their policy is looting and give some share from their loot other local goons to keep common people hostage.

 

[Beast]

Pakistan to Seek Debt Relief From China Belt and Road Loan
By
Faseeh Mangi
February 9, 2021

• China-financed power plants in Pakistan resulted in oversupply
• Relief part of Pakistan’s plan to reduce power payments

Pakistan plans to ask China for relief on payments for power projects Beijing financed over the past eight years, the latest developing nation that’s struggling to repay debt under President Xi Jinping’s Belt and Road Initiative.

In informal talks, Pakistan and China have discussed easing terms on the repayment of debt on about a dozen power plants, according to a person with knowledge of the matter, who said Islamabad hasn’t made a formal request yet. The parties have canvassed Beijing’s willingness to stagger debt payments, as opposed to lowering equity returns, the person said, requesting anonymity as the plan is private.


An enormous build-out of Chinese-financed power plants in Pakistan, which was originally intended to solve its electricity shortages, has resulted in a surplus that Islamabad isn’t able to afford. Infrastructure projects funded by China’s initiative in other developing nations, such as Sri Lanka and Malaysia, have suffered issues ranging from heavy debt loads to corruption.

A spokesperson at China’s Ministry of Foreign Affairs said they aren’t aware of Pakistan’s plan to seek debt relief.

“Energy projects have provided Pakistan with a large amount of stable and low-priced electricity, effectively reducing the overall price of electricity in Pakistan,” the spokesperson said in a written response. “China-Pakistan energy cooperation has progressed smoothly and brought about real economic and social benefits.”


Pakistan’s power division didn’t respond to a request seeking comment.

China has previously denied U.S. criticism that the initiative leads to debt traps, while acknowledging that countries have had difficulties repaying loans due to the pandemic-induced global recession. Last year, Beijing canceled interest-free loans to 15 African countries due to mature by the end of 2020, and it has delayed other payments.

The Belt and Road program had found new life in Pakistan last year with the signing of $11 billion worth of projects, most of which went to revamping the nation’s railway system.


While Chinese financing has helped Pakistan diversify fuel supplies, it has also resulted in a surplus of electricity, which is problematic for the government in Islamabad because it is the sole buyer and pays producers even when they don’t generate. To help tackle the issue, the government has negotiated with power plants, which produce roughly half of its electricity, to lower rates.

Pakistan will formally make the request to defer debt payments to China, as well as other plants that were part of the latest power policy, after it concludes deals with those local power producers to reduce electricity tariffs, said the person with knowledge of the matter. Debt relief from China will also help the government reduce power payments.

— With assistance by Lucille Liu, and Jing Zhao
---

Happy now are we? Where is game changer CPEC?

@Horus @waz @TaiShang @muhammadhafeezmalik @Mav3rick @Muhammad Omar @Joe Shearer @ziaulislam @Path-Finder @PakSword @Patriot forever @Black.Mamba @Indus Pakistan @koolio @Morpheus @beijingwalker

We have seen rubbish news like heading with "China seek guarantee of few billions from Pakistan for CPEC" and we know later what is turn out.

Especially from propaganda US media like bloomberg. I suggest you shouldnt up high and down for such news.

 

[Dark1]

Over capacity is actually good, it shows industry can just open factories there since there will be no worry about the electricity supply. In Indonesia, Java and Bali has oversupply electricity as well.

Maybe there is something different with the Pakistan-China agreement, or maybe since our state owned electricity company also has many power plants, so if over supply happen, they just need to buy electricity from the private owned power plants while the ones that they own will just reduce the operation or shut down for some time until demand pick up again.

India also went through a similar period but in our case the demand from industry and domestic consumption was already their.
But a few missteps were fixed Government assured payback to enron and expensive electricity from the anil ambani backed reliance power. Both were gas powered and expensive. Both failed.
Pakistan has to be smart about balancing the coal and gas based power plants generation.

 

[Patriot forever]

bhai its not about pro-China or anti China debate we all know the policy of IPPs were first introduce in PPP second government Habco is the example of that era .... but in 2008 when PPP formed government third time it reintroduce the policy and most of the IPPs installed in that era were granted licences to local investors Minsha group and others. This Policy of Capacity Payment was introduced in that ERA and later adopted by PML-N government as Industry Standard
plz here recall the Karkey Scandal as well, It is believe in some circle believe that Capacity payment was a way to get commissions on perpetual basis by the people in power and IPPs were also getting benefiting with this policy

Chinese companies joined IPP industry in Pakistan during PMN-N government and other than financing structure they adopted the 'Industry Standard', so my point is

Why target only Chinese Investment why not question other investors .... who are the bigger beneficiaries of this policy .....???

Power Sector and LNG are the 2 biggest corruption scandals of Pakistan history

In simple words sir, ppp showed the way Plmn followed. CPEC power plants were signed under 2015 policy, they could have easily opted for better negotiated contracts but Alas.

I am not trying to single out China. Instead I do not hold China responsible at all, it was our fault that we had such people in power at that time. We should apologize to them. We need to understand that it is not the government of China and direct concessionary loans that these power plants are built on rather Chinese companies/investors on commercial loans. There is a reason why CPEC authority is being formed so that CPEC can never be used again for personal political and financial benefits.

I am talking in a sense that after we are done with PPP era plants (little that we can salvage) after that we will have to persuade China for some concessions. The key to realize CPEC true potential lies in making these power plants more affordable.

We are in a fix right now where we have excess generation which our industries are reluctant to take up.

 

[Indos]

India also went through a similar period but in our case the demand from industry and domestic consumption was already their.
But a few missteps were fixed Government assured payback to enron and expensive electricity from the anil ambani backed reliance power. Both were gas powered and expensive. Both failed.
Pakistan has to be smart about balancing the coal and gas based power plants generation.

Gas power plant is still quite competitive, nowadays our new power plants are gas powered, particularly for some set up in the big cities.

Jakarta just get a new gas power plant but it will be used as back up only, while older power plan is already enough to supply the city needs.

The construction is still going on about a year ago.

 

[Protest_again]

When India is signing solar power for as low as ₹2 a unit, why is Pakistan stuck with ₹10 a unit power? How does it help Pakistan compete?