According to the sources, Pakistan has asked China to roll over its existing loans of $10.735 billion and lend it an additional $10 billion as a deposit fund, bringing the total debt to $20.74 billion.
During Prime Minister Imran Khan’s recent visit to China, the two sides discussed, among other things, rolling over all financing facilities (safe deposits of $4.0 billion and commercial loans of $6.735 billion) upon maturity, as requested by the Ministry of Finance.
It is worth noting that a $2.0 billion safe deposit will mature on March 23, 2022. A request for rollover has already been made, which was duly signed by the Prime Minister in January 2022.
A three-year commercial loan of RMB15 billion ($2.235 billion) from a consortium of China Development Bank (CDB), Bank of China Limited (BOC), and Industrial and Commercial Bank of China (ICBC) will also mature on March 25, 2022.
The Ministry of Finance has contacted CDB about refinancing. On January 27, 2022, a formal letter was sent. Other deposits and commercial loans will be paid off at a later date.
Pakistan has also made a special request for a $10 billion deposit fund. Furthermore, the State Bank of Pakistan (SBP) has proposed increasing the currency swap arrangement to $15 billion.
Pakistan has also requested that China assist in the support of the IMF [International Monetary Fund] Board and it’s financing.
In August 2021, the IMF allocated additional Special Drawing Rights (SDRs) to its member countries in order to assist them in combating the pandemic. China received SDR 29.22 billion as its share of the allocation.
The Ministry of Finance has asked China for permission to use a portion of its share, either bilaterally or through an IMF-mandated mechanism.
The Ministry of Energy renegotiated Power Purchase Agreements (PPAs) with IPPs, including non-CPEC-IPPs. This renegotiation resulted in a significant reduction in the price of electricity from those IPPs.
The same arrangement with CPEC-IPPs is expected to reduce power costs by $14.29 billion over the life of the project. It has been learned that the Chinese government will make up the difference of $14.29 billion through other means.
According to sources, the SBP has proposed holding seminars in China in order to attract Chinese investors and entrepreneurs interested in establishing digital banks in Pakistan.
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