ISLAMABAD: China agreed to reschedule more than USD 2 billion of debt from Pakistan for a period of two years, providing a big relief to the cash-hungry government, which is in the process of rebuilding foreign exchange reserves through new loans.
The Economic Coordination Committee (E.C.C.C.) of the Cabinet, chaired by Finance Minister Ishaq Dar on Thursday approved the revised terms of the agreement reached between Islamabad and Beijing, according to senior Pakistani officials, the express grandstand informed.
Pakistan has built two nuclear power plants in Karachi that have a combined generating capacity of 2,117 megawatts. The total cost of the plants is $9.5bn, including $6.5bn financing from China. The loan was granted by the Export-Import (Exim) Bank of China.
Of USD 2 billion, more than USD 625 million were due in this year, which will now be on pause. The $6.5 billion is publicly guaranteed debt, and more than $2 billion came due in two years in which China agreed to pause, according to senior officials.
He Ministry of Finance it did not make an official statement on the ECC’s seal of approval to the revised deal with China.
China has time and again helped Pakistan meet its debt obligations by providing new loans and rolling over existing debt.
China prematurely refinanced its $1.3 billion worth of trade loans in June, helping Pakistan avoid defaulting on its international debt obligations during the period in which the International Monetary Fund the program stalled.
After signing the new IMF program, Pakistan’s gross official foreign exchange reserves have recovered to $8.7 billion, from the critically low level of $4.5 billion before the IMF deal.
Earlier, Prime Minister Shehbaz Sharif said that China transferred more than $5 billion in loans.
The Economic Coordination Committee (E.C.C.C.) of the Cabinet, chaired by Finance Minister Ishaq Dar on Thursday approved the revised terms of the agreement reached between Islamabad and Beijing, according to senior Pakistani officials, the express grandstand informed.
Pakistan has built two nuclear power plants in Karachi that have a combined generating capacity of 2,117 megawatts. The total cost of the plants is $9.5bn, including $6.5bn financing from China. The loan was granted by the Export-Import (Exim) Bank of China.
Of USD 2 billion, more than USD 625 million were due in this year, which will now be on pause. The $6.5 billion is publicly guaranteed debt, and more than $2 billion came due in two years in which China agreed to pause, according to senior officials.
He Ministry of Finance it did not make an official statement on the ECC’s seal of approval to the revised deal with China.
China has time and again helped Pakistan meet its debt obligations by providing new loans and rolling over existing debt.
China prematurely refinanced its $1.3 billion worth of trade loans in June, helping Pakistan avoid defaulting on its international debt obligations during the period in which the International Monetary Fund the program stalled.
After signing the new IMF program, Pakistan’s gross official foreign exchange reserves have recovered to $8.7 billion, from the critically low level of $4.5 billion before the IMF deal.
Earlier, Prime Minister Shehbaz Sharif said that China transferred more than $5 billion in loans.