CPEC Investors Urge Pakistan to Settle Rs.550 Billion Outstanding Dues
International investors are urging Pakistan to remit dividends owed to shareholders in power plants under the China-Pakistan Economic Corridor (CPEC).
The outstanding dues for CPEC power projects amount to approximately Rs. 550 billion. This issue was a focal point during discussions when Foreign Minister Ishaq Dar and Planning Minister Ahsan Iqbal visited Beijing, as reported by Business Recorder.
The Private Power Infrastructure Board (PPIB) has requested the State Bank of Pakistan (SBP) to expedite the remittance of shareholder dividends. However, the SBP is constrained by a shortage of dollars.
Recently, Qatar’s Sheikh Hamad Bin Jasim Bin Jaber Al Thani wrote to Prime Minister Shehbaz Sharif, requesting the payment of $450 million in receivables for the Port Qasim Electric Power Company (PQEPC). His letter revealed that the project has not paid any dividends to investors, now totaling $558 million.
PQEPC has warned of a potential default on loan agreements and government guarantees if dues are not settled.
A preliminary agreement to resolve the issue of foreign exchange availability has been approved, which may increase the owed amount to Rs. 13.6 billion. PQEPC has indicated that it may suspend operations without incurring liquidated damages if payments are not made.
At a recent Board of Investment (BoI) meeting, Additional Director SBP Muhammad Tahir stated that although there were past issues related to foreign exchange reserves, the situation is improving. He mentioned the implementation of a queue system for dividend repatriation and a Local Deployment Policy, allowing companies to earn interest on idle dividends until they can be repatriated as reserves improve.
