Pakistan has intensified efforts to defer payments exceeding Rs 550 billion to Chinese Independent Power Producers (IPPs) for a period of three to four years, as part of the conditions imposed by the International Monetary Fund (IMF) for a new loan programme.
Sources within the Ministry of Finance have confirmed that the IMF has stipulated that the loan funds must not be used to make payments to China, necessitating a delay in these payments until the end of the loan period.
The issue of these substantial dues was a focal point during the Prime Minister's recent visit to China, where discussions were held with Chinese authorities regarding the deferment.
According to sources, China has agreed to initiate talks on postponing the payments, although no consensus has been reached on revising the tariffs for Chinese IPPs.
"The IMF wants to ensure that the money from the loan programme is not utilised for payments to China," stated a Ministry of Finance official. "Our efforts are directed towards meeting this condition by deferring the dues."
Despite Pakistan's push, China remains firm on its stance regarding tariff revisions. Sources reveal that China has declined to agree to any changes in the tariffs, citing that altering the tariffs would compel them to renegotiate agreements with other countries as well.
"China's position is that if Pakistan changes the tariff, other countries will also demand the same," added the source. "This could complicate existing agreements with numerous nations."
The need to defer these payments has become more pressing as Pakistan seeks to fulfill the stringent conditions laid out by the IMF. The successful deferral of these dues is critical for Pakistan to secure the much-needed financial support from the IMF, aimed at stabilizing the country's economy.
