Energy projects under CPEC to be shifted to IPP

[BHarwana]

https://twitter.com/x/status/1022867847331110912

 

[Viny]

Thats a good move to reduce govt debt.
But govt has to ensure that under IPP the private partner is Pakistan based company and not some Chinese company.

China would like to have it under chinese company, so that it gets hold in the market and local competition could build around in near future. Also this gives more business to chinese companeis and a model to earn long term revune from market outside china.

 

[Defenceanalyst91]

https://twitter.com/x/status/1022867847331110912

I think previous power projects in IPP model resulted in lot of circular debt

 

[Bilal.]

I think previous power projects in IPP model resulted in lot of circular debt

Yes, the prime reason being that they were based on expensive fuel oil and their unit cost was unsustainable where as the new ones are based on coal and natural gas and have much more affordable unit cost.

 

[BHarwana]

Lol
Pakistani debt turned into foreign direct investment lol. Cry hard fellows. Hahahahaha

 

[Samlee]

Thats a good move to reduce govt debt.
But govt has to ensure that under IPP the private partner is Pakistan based company and not some Chinese company.

China would like to have it under chinese company, so that it gets hold in the market and local competition could build around in near future. Also this gives more business to chinese companeis and a model to earn long term revune from market outside china.

No You Don't Get It There Was Never Any Debt In The First Place.This Myth Was Used To Misguide People.

I think previous power projects in IPP model resulted in lot of circular debt

Thse IPPs Were Based Upon Unbearably Expensive Furnace Oil Imported.These Are Based Upon LNG and Coal Which Is Relatively Cheaper Also The Efficiency Of These Plants Is Much Higher

 

[Viny]

No You Don't Get It There Was Never Any Debt In The First Place.This Myth Was Used To Misguide People.

Approximately $11 billion worth of infrastructure projects being developed by the Pakistani government will be financed at an interest rate of 1.6%,after Pakistan successfully lobbied the Chinese government to reduce interest rates from an initial 3%. Loans will be dispersed by the Exim Bank of China, China Development Bank, and the ICBC.

$15.5 billion worth of energy projects are to be constructed by joint Chinese-Pakistani firms, rather than by the governments of either China or Pakistan. The Exim Bank of China will finance those investments at 5–6% interest rates, while the government of Pakistan will be contractually obliged to purchase electricity from those firms at pre-negotiated rates.

Some of the motorways and expressways under CPEC are financed by ADB
Source: https://en.wikipedia.org/wiki/China–Pakistan_Economic_Corridor#Finance

No money comes for free, there is always some other other strings attached.

 

[Samlee]

Approximately $11 billion worth of infrastructure projects being developed by the Pakistani government will be financed at an interest rate of 1.6%,after Pakistan successfully lobbied the Chinese government to reduce interest rates from an initial 3%. Loans will be dispersed by the Exim Bank of China, China Development Bank, and the ICBC.

$15.5 billion worth of energy projects are to be constructed by joint Chinese-Pakistani firms, rather than by the governments of either China or Pakistan. The Exim Bank of China will finance those investments at 5–6% interest rates, while the government of Pakistan will be contractually obliged to purchase electricity from those firms at pre-negotiated rates.

Some of the motorways and expressways under CPEC are financed by ADB
Source: https://en.wikipedia.org/wiki/China–Pakistan_Economic_Corridor#Finance

No money comes for free, there is always some other other strings attached.

I Am Talking About The Power Projects There Was Never Any Debt In The Books Of Govt. Ab Samjhi

 

[Viny]

I Am Talking About The Power Projects There Was Never Any Debt In The Books Of Govt. Ab Samjhi

Ya.. contractually obliged to purchase electricity from those firms at pre-negotiated rates probably does sound as bad a debt trap. Debt do end with payment of capital+interest. But an contractually obliged to purchase electricity from those firms at pre-negotiated rates without end dates is life long payout..

Kaas app samaj jaate...

 

[RealNapster]

Ya.. contractually obliged to purchase electricity from those firms at pre-negotiated rates probably does sound as bad a debt trap. Debt do end with payment of capital+interest. But an contractually obliged to purchase electricity from those firms at pre-negotiated rates without end dates is life long payout..

Kaas app samaj jaate...

20 years. Contractually obliged to purchase electricity for 20 years.

 

[Chakar The Great]

Thats excellent decision.