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Business Recorder

Payments to Chinese IPPs: PQEPC seeks help of Aurangzeb

ISLAMABAD: Port Qasim Electric Power Company Private Limited (PQEPC) has formally approached Finance Minister Senator Muhammad Aurangzeb, seeking urgent release of funds to the Central Power Purchasing Agency–Guaranteed (CPPA-G) for onward payment to Chinese Independent Power Producers (IPPs). Currently, the outstanding dues owed to Chinese IPPs stand at approximately Rs 480 billion. A portion of this amount is expected to be paid before Prime Minister Shehbaz Sharif's upcoming visit to Beijing, as a gesture to reassure Chinese stakeholders. In a letter to the finance minister, PQEPC's Chief Executive Officer, Wang Dongfang, emphasised that the 1,320 MW Port Qasim Coal-Fired Power Project—developed under the China-Pakistan Economic Corridor (CPEC)—has consistently supplied clean, reliable, and cost-effective electricity to the national grid, even during the COVID-19 pandemic. Chinese IPPs face Rs500bn in unpaid dues He noted the project's active contribution toward mitigating circular debt. According to Wang, the total outstanding dues for the Port Qasim project have reached Rs 87.5 billion (approximately $308.2 million) as of June 30, 2025. These payments have been delayed by over six months and risk further escalation. The CEO warned that the shareholders and sponsors from China and Qatar have expressed deep dissatisfaction over the growing payment backlog, and have urged the government of Pakistan to take immediate action to reduce the outstanding amount. He also pointed out that the current situation legally entitles PQEPC to suspend operations under Section 9.10 of the Power Purchase Agreement (PPA), without incurring any liquidated damages. Wang emphasised that the project enjoys a comparative advantage in Energy Purchase Price (EPP) tariffs when compared to oil- and RLNG-based power plants. A suspension of operations, he cautioned, would be a 'lose-lose' scenario for both parties and must be avoided through timely payments. He further warned that failure to settle dues could result in a breach of the Loan Agreement and default under the Government of Pakistan's Sovereign Guarantee, jeopardizing the country's financial credibility and investor confidence. Given the critical nature of the situation, Wang has requested the finance minister's intervention and coordination with relevant authorities to expedite financial support to CPPA-G, enabling it to clear outstanding dues to the Port Qasim project at the earliest. The Finance Ministry typically releases Rs 5 billion per month to CPPA-G through an escrow account, set up in coordination with Chinese authorities, for the payment of energy costs to Chinese IPPs. Copyright Business Recorder, 2025