Concerns over delayed payments affect Pakistan’s financing prospects with China’s Exim Bank

ISLAMABAD: A meeting between Pakistan’s Minister of Planning, Development, and Special Initiatives, Ahsan Iqbal, and China’s Exim Bank President took place in Beijing to discuss ongoing and future projects to promote economic cooperation between the two countries.

However, the meeting highlighted a pressing concern regarding China’s Exim Bank’s willingness to extend concessional loans to Pakistan. The Bank’s president cited a limited window for such financing and expressed concerns related to non-payment or delayed payments received by Chinese companies operating Independent Power Producers (IPPs) in Pakistan.

Despite the fact that the Minister highlighted recent positive trends in Pakistan’s economy, attributing them to the government’s policies and administrative measures, and the Exim Bank’s President acknowledging the improvements, he suggested that the country should explore alternative financing options.

Key projects discussed during the meeting include the ML-1 railway infrastructure upgrade, the Pakistan Satellite Centre (PSC) project, and collaborations between Exim Bank of China and Exim Bank of Pakistan. While the Minister highlighted the importance of these projects, the Exim Bank President raised concerns about the ML-1 project, citing potential fiscal burdens on Pakistan.

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The Exim Bank President specifically mentioned issues regarding non-payment or delayed payments to Chinese IPPs in Pakistan, which indirectly affects the Bank’s financial interests. The minister assured the Bank that Pakistan is committed to resolving these disputes and improving the business environment for Chinese companies.

The two parties agreed to strengthen economic cooperation between Pakistan and China by exploring new financing options, enhancing collaboration with Exim Bank of Pakistan, and facilitating Chinese investment in Pakistan.