Pakistani Ministers in Beijing to Renegotiate CPEC Debts

Pakistan's Finance and Energy Ministers are in Beijing to renegotiate the rescheduling of the country's mounting debts under the China-Pakistan Economic Corridor (CPEC). China has been initially hesitant, delaying talks. Pakistani officials aim for an eight-year extension for repayments, conversion of interest payments to Chinese currency, and lowering overall interest rates.

Two key Pakistani ministers have traveled to Beijing to discuss rescheduling their financially strained country's debts linked to the China-Pakistan Economic Corridor (CPEC).

Pakistan's Finance Minister Muhammad Aurangzeb and Energy Minister Sardar Awais Ahmad Khan Laghari have been in Beijing for the past three days, engaging in crucial talks with various Chinese authorities, including Pan Gongsheng, the Governor of the People's Bank of China (PBoC), and Cao Yuanyuan, Deputy Secretary-General of the National Association of Financial Market Institutional Investors (NAFMII).

China was initially hesitant to engage in these debt rescheduling discussions, signaling a potential disagreement over energy loans. Pakistan's outstanding dues for CPEC power projects have surged by 44% to Rs 401 billion by the end of the last fiscal year, violating the 2015 CPEC Energy Framework Agreement. Consequently, Pakistan has requested an eight-year extension for repaying energy debts, conversion of interest payments to Chinese currency, and a reduction in overall interest rates. These measures aim to cut energy costs and secure a USD 7 billion bailout package from the International Monetary Fund (IMF).

(With inputs from agencies.)