As Prime Minister Shehbaz Sharif attended a groundbreaking ceremony of the 1200-megawatt Chashma-5 nuclear power plant in Mianwali on Friday, he contended that the “risk of potential default has been completely averted”.

Addressing a ceremony comprising Chinese officials and ministers, Shehbaz said, “Our detractors have been running rumours, fabricating rumours all around the places that God forbid, Pakistan is going to default on its sovereign payments, that God forbid our economy will be in shambles.

“I’m not going into that. You know it very well that we crossed very turbulent waters in the last 15 months,” he added.

Shehbaz asserted, “The risk of potential default has been completely averted through team efforts — untiring efforts — from all the components of the government of Pakistan and all our institutions.”

He then mentioned the announcement of the approval of the IMF programme by the board and the subsequent inflows of $4.2bn in the State Bank of Pakistan — of which $1.2bn were received from the IMF as the first tranche of its $3bn programme and the rest from “our brotherly countries Saudi Arabia and UAE”.

At the outset of his address, Shehbaz said, “The Chashma-5 nuclear energy project, which is by itself a huge milestone, a huge success story and a wonderful symbol of cooperation between two great friends.”

“This mutual cooperation to promote clean, efficient and comparatively cheaper energy is a gift of friendship between the two countries and a model for other countries to emulate.”

The premier later expressed his gratitude to China for its longstanding support saying, “Unless we mention the role of our great and most trusted friend China, the story will remain incomplete.”

Shehbaz recalled that the “Chinese government and Chinese commercial banks rolled over amounts back to Pakistan to the tune of more than $5bn” in the past four months.

He said, “This is not a small contribution by a great friend at a time which was one of the most difficult times Pakistan was facing.”

In February, the China Development Bank had approved a $700 million credit facility for Pakistan and about a month later, the Industrial and Commercial Bank of China Ltd had approved a rollover of a $1.3bn loan.

In March, China had rolled over a $2bn loan and an amount of $1bn was also received last month.

The prime minister especially thanked the Chinese government and companies for “not increasing the price on the basis of 2017-18, not factoring in average inflation”, and giving a discount of Rs30 million on his request, which he termed “a very kind gesture”.

Shehbaz revealed that some of his colleagues advise him to not ask for discounts from China as the country has already helped Pakistan a lot.

“I said [to them that] there are no two opinions about it — absolutely — but this is a deal between two companies, two entities and two friendly countries.”

The premier went on to say that as long as the companies are “transparent, serious and sincere to each other” and are communicating with each other “without any ambiguity, they will understand our financial difficulties”.

“I have no doubt that let alone any kind of misunderstanding, they will be willing to handhold Pakistan in this hour of difficulty,” the prime minister asserted.

Concluding his address, Shehbaz expressed the hope that the companies involved will “team their efforts together” to complete the project soon.

“This project will be completed hopefully in the next seven to eight years, but in my dictionary, seven to eight years mean seven to eight months.”

He noted that the project will be a great favour to the people of Pakistan as the industrial and agriculture sectors consistently stress the need for cheaper and more efficient energy.

The Chashma nuclear power plant

Last month, Pakistan and China had signed a memorandum of understanding (MoU) to build a new unit of the 1,200 MW Chashma-5 (C-5) nuclear power project.

In January, the development of C-5 — the fifth unit of the Chashma Nuclear Power Generating Station — had hit a snag because of the reported refusal by the Ministry of Finance to furnish a sovereign guarantee.

The Pakistan Atomic Energy Commis­sion (PAEC) has been running four nuclear power units based on Chinese technology near Mianwali district’s Chashma area.

With a nameplate capacity of 325MW each, C-1 and C-2 started operations in 2000 and 2011, respectively. C-3 and C-4 became operational in 2016 and 2017, respectively, and have a gross capacity of 340MW each.

Separately, the PAEC established Karachi Nuclear Power Plant Unit-2 and Unit-3 at Paradise Point, once a popular public beach on the outskirts of Karachi. Having a nameplate capacity of 1,100MW each, the K-2 and K-3 started generating electricity in 2021 and 2022, respectively.

The six nuclear plants have a combined installed capacity of 3,530MW, constituting a share of 8.1 per cent in the country’s total nameplate power-generating capacity.