Chinese CPEC IPPs press Pakistan govt for Rs475bn dues
Chief Executive Officers (CEOs) of Chinese CPEC IPPs have been writing letters to government functionaries, with copies also shared with the Chinese Ambassador to Pakistan. The Ambassador, sources said, is actively engaging with senior Pakistani officials to finalize the Prime Minister's agenda for bilateral meetings with Chinese leadership.
In a recent letter, Wang Dongfang, CEO of Port Qasim Electric Power Company (PQEPC), expressed deep concern over the growing delays in tariff payments by the Central Power Purchasing Agency-Guaranteed (CPPA-G).
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According to Wang, under the Government of Pakistan's guidance, the 1,320 MW Port Qasim Coal-Fired Power Project—one of the flagship energy ventures under the China-Pakistan Economic Corridor (CPEC)—has consistently provided clean, reliable, and economical electricity to the national grid.
'While we highly appreciate the efforts of the Government of Pakistan and CPPA-G in arranging funds and making tariff payments to IPPs, the total outstanding amount due to PQEPC has reached Rs 81 billion ($286.94 million) as of July 31, 2025, with a delay period of over six months, which could further escalate,' the letter stated.
The CEO cautioned that shareholders and sponsors of the project, including those from China and Qatar, have conveyed 'significant discontent' over the payment backlog and have requested urgent measures to reduce the outstanding amount.
'We would like to notify that the current dues entitle PQEPC to suspend plant operations under Section 9.10 of the PPA, without any liability for Liquidated Damages (LDs),' the CEO warned.
PQEPC also highlighted that its Energy Purchase Price (EPP) tariff is comparatively more competitive than oil- and RLNG-based power plants. Suspension of operations, the CEO warned, would result in a 'lose-lose' outcome, which both sides must avoid through timely settlement of dues to ensure sustainable generation and prevent triggering defaults under Loan Agreements and the Government of Pakistan's Sovereign Guarantee.
Concluding his letter, Wang urged the Finance Minister, Senator Muhammad Aurangzeb and Planning Minster, Ahsan Iqbal to take immediate notice of the 'critical situation' and coordinate with relevant authorities to arrange financial support for CPPA-G so that the outstanding dues could be cleared without further delay.
When an official was contacted for comments on the correspondence of Chinese CPEC IPPs on payment of outstanding amounts, he responded that since the government does not have enough fiscal space, the payments will be made on the basis of availability of resources. However, energy payments are being made to them through Escrow Account.
The government has earmarked Rs 5 billion per month to be paid to the Chinese CPEC IPPs.
Copyright Business Recorder, 2025
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