CPEC projects financed through composite financing package, says official

By Mian Abrar

Pakistan on Tuesday reiterated its commitment to implement all projects linked to China-Pakistan Economic Corridor (CPEC), stating that all state institutions support the multi-billion-dollar project which is key to the future of the country’s socio-economic development.

In the backdrop of some negative media reports emerging in the international media, an official of Ministry of Planning and Development said that Pakistan has repeatedly stated that it is fully committed to CPEC which enjoys complete consensus among all institutions and political forces in Pakistan.

“It is a win-win project that is key to the future of Pakistan’s socio-economic development. It is not surprising that detractors of Pakistan-China cooperation are presenting a negative image of CPEC and the benefits that it brings to the people of Pakistan. Their negativity cannot weaken our resolve and commitment to CPEC,” said the official.

The official said that Pakistan offers attractive investment opportunities and Pakistan welcomes all countries to take advantage of this favourable environment and to invest in developmental projects in Pakistan instead of levelling unfounded criticism against a country that has stood by Pakistan at all times.

“We have noted recent media reports questioning the viability of CPEC, claiming that it would create an unbearable debt burden for Pakistan. Such media reports are often one-sided, distort facts, and are based on irresponsible statements by individuals who either have no understanding of CPEC or are driven by ulterior motives,” said the official.

While constructive critiques and recommendations by experts and analysts are always welcomed, the official added, it is important that such critiques be informed by research based on factual information rather than mere partial opinion.

“It must be clarified that CPEC projects are financed through a composite financing package comprising long-term government-to-government concessional and preferential loans, as well as grants from the Government of China. Repayments on these loans would not commence in the immediate future,” the official added.

The official was of the view that energy sector is a key priority area under CPEC’s early-harvest phase and responds to our immediate energy needs. Chinese companies are investing in the energy sector in IPP mode and have raised funds from Chinese banks and investors. These do not constitute any debt obligation on the Government of Pakistan.

“It is because of the favourable financing arrangements that Pakistan opted for Chinese investment under CPEC. China stepped forward to support Pakistan’s development at a time when foreign investment had dried up, and economic activity was being crippled by energy shortages and infrastructure gaps”.

The official said the CPEC has provided enormous opportunities for Pakistan to grow economically. “It is an engine for economic growth and will increase Pakistan’s Gross Domestic Product (GDP) up by two per cent to three per cent. CPEC has also facilitated in overcoming crucial energy, transport infrastructure and supply chain bottlenecks,” the official added.

Under CPEC, the official said, development of Gwadar would ensure the strengthening of maritime sector particularly the coastal tourism and local fishery industry thereby benefitting the local communities.

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