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ISLAMABAD: Pakistan has signed a $6.5 billion ‘concessionary loan’ agreement with China for projects under civil nuclear cooperation, including development of two power plants near Karachi of 2,200MW, Prime Minister Nawaz Sharif said here on Wednesday.

“This is a very big loan that China has extended. It is very cheap and will ensure uninterrupted power supply,” he said at a briefing on the economic situation for members of his cabinet and the media.

Finance Minister Ishaq Dar made a detailed presentation.

But the prime minister made it clear that nuclear power projects usually take a long time to complete, like hydropower projects such as Dasu, Diamer-Bhasha and Bunji.

Finance Secretary Dr Waqar Masood Khan said a major part of the loan was concessionary for 15-20 years and some commercial, for 10 years.

Mr Dar chipped in that the loan agreement signed with the Exim Bank of China was at an average interest rate of 3-4 per cent and there was a moratorium on repayments for the first three years.

Replying to a question, the prime minister conceded that not only with Iran but Pakistan’s trade with many regional and friendly countries, including Afghanistan, China and Turkey, was not up to the mark and required to be increased.

The finance minister said the government was making efforts to resolve the issue of non-payment of electricity dues with the provinces.

He said a proposal was under consideration to transfer the power companies at book value to the provinces and revive the office of federal adjustor for clearance of bulk energy dues.

INFLATION: While conceding inflationary pressure, the finance minister presented copies of two summaries the caretaker government had approved for increasing electricity tariff and raising Rs190bn in taxes under a commitment with the IMF that had been shelved by former president Asif Ali Zardari.

These decisions were required to be taken by the PPP and caretaker government to pass on the natural impact of energy tariff to the people but these were kept frozen for more than 15 months and “now they are doing politics on inflation”, he said.

Mr Dar said the government had taken a bold decision to clear the backlog, resulting in inflation, but conceded that it had not been successful in improving energy sector recoveries.

Comments (5) Closed

ahmad saeed khan Jan 02, 2014 03:40pm

I am surprised to know that a simple case under hearing of Lahore high court judge for the last one year is with out any decision. It seams me that inefficiency or cruption in the courtl ed to such delay.

Hasan Jan 02, 2014 05:47pm

We are grateful to our friends of China, as they have been long term friends in many fields. Their friendship we do value, but in putting these high powered Nuclear Power Plants (as yet untested by China), I feel the amount of the loan could better be associated to providing Solar Power instead. The proximity of the Nuclear installations to our largest city and commercial hub with over 20 million people living here is a potential danger to life and limb causing unspeakable disruption in life if any accident occurs. As it is, Pakistan is unprepared for lesser calamities like floods, earthquakes, big Fires and the like; what will we do in case of a Nuclear leak so close to a highly populated city -- Pakistan's life line. We must learn from the problems Japan is facing for the last several months. SOLAR ENERGY is SAFE though it may initially cost more, which I doubt; due to the mere size of the project, Solar Panels price tags could come down considerably to become viable without Nuclear exposure to such a huge population --- and these Solar Panels are also made in China. It can thus be a win win situation all around. Besides, the Solar route will take lesser time to completion than the untried Nuclear route.

I am in hopes that sound thoughts will prevail in both China and Pakistan.

Ahmad Nasser Jan 02, 2014 08:00pm

@Hasan: And what do you do when the sun goes down or it rains or the sky is overcast? Solar can work effectively only about 25% of time. Electrical energy cannot be economically stored as of now. Life is about balancing risks and rewards. We have to take risk. We do not stop driving because people get killed in road accidents. Seventy percent of the French power is nuclear.

Silajit Jan 02, 2014 08:53pm

@Hasan: Your "friend" is giving you a "loan" to buy the untested nuclear reactors that THEY manufacture. In return they get live testing done and a reference customer for future sales. They don't lose money and they have speeches made in their honor because of the word "nuclear." No such advantage occurs to them if they sell you Solar plants.

waqar Jan 02, 2014 09:06pm

so many billionaires in Pakistan with the leader of the thieves being number one in the list and still we are begging. the begging habit will not finish because the poor man begs to fill the billionaires pockets. NAB should look into these billionaires more closely and the courts should and must help.