ISLAMABAD: Pakistan’s economic team, including Senator Muhammad Aurangzeb, Federal Minister for Finance and Revenue, and Sardar Awais Ahmad Khan Leghari, Minister for Power, met with Chinese Finance Minister Lan Fo’an in Beijing on Thursday. The discussions centered on key financial and power sector issues.
The delegation was sent to Beijing to address major cooperation topics such as the issuance of Panda Bonds, re-profiling of loans, and converting imported coal power plants to Thar coal. Initially, the Panda Bonds are expected to be up to $300 million, potentially increasing to $700-$750 million.
The ministers briefed the Chinese counterpart on Pakistan’s tax and energy reforms and explored ways to enhance bilateral economic cooperation, particularly in finance and banking. They also had a bilateral meeting with Sheng Hetai, President of M/s Sinosure, discussing economic recovery, energy, and taxation.
Sinosure has shown interest in implementing significant hydropower projects, including the 700 MW Azad Pattan and 1,124 MW Kohala Hydropower Projects. Despite previous reluctance due to payment issues and substantial circular debt, guidance from Beijing in May 2024 has spurred renewed interest. Pakistan is also pushing for Chinese investors to submit Letters of Intent (LoI) for these projects, as the LoI from China Gezhouba Group Company for Azad Pattan expired in April 2023.
Finance Minister Aurangzeb and Power Minister Leghari are leading discussions on power sector structural reforms recommended by the IMF, which include managing nearly $15 billion in energy sector debt. These reforms are part of a broader $7 billion bailout agreed with the IMF to address Pakistan’s severe debt issues and improve power sector efficiency.
The Chinese government has supported over $20 billion in planned energy projects in Pakistan, crucial for addressing the power sector’s financial challenges, including high theft rates and distribution losses.
