Govt eyes financial closure of 10,400MW projects in March

KARACHI: Federal Commerce Minister Khurram Dastgir Khan said on Wednesday the power projects of 10,400 megawatts under the Pak-China Economic Corridor (PCEC) are expected to achieve financial close with a consortium of Chinese lenders next month.
The minister did not give details of the investment, but the government earlier said the Chinese government and banks will finance Chinese companies to build $45.6 billion worth of energy and infrastructure projects in the country over the next six years.
The minister, while speaking to the media before meeting with the members of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said the energy projects worth 16,600 megawatts will be developed under the planned PCEC in two phases.
“(Power projects of) 10,400 megawatts will become operational by the mid of 2017,” Khan said.
China has committed to invest around $33.8 billion in energy projects and $11.8 billion in infrastructure development. The neighbouring country’s government and banks, including China Development Bank and the Industrial and Commercial Bank of China Ltd are likely to loan funds to Chinese companies for the planned PCEC.
Chinese companies investing in the energy sector in Pakistan are China’s Three Gorges Corp and China Power International Development Ltd. The government sees Chinese investments as key to solve power shortages that have crippled the economy.
Under the PCEC, $15.5 billion worth of coal, wind, solar and hydro energy projects will come online by 2017 and add 10,400 megawatts of energy to the national grid. An additional 6,120 megawatts will be added to the national grid at a cost of $18.2 billion by 2021.
Earlier this week the federal cabinet approved the PCEC for starting negotiations with Beijing for importing 1,000 megawatts of electricity from China by laying a new transmission line.
“Besides, these projects, the government is planning to make new investment in the energy sector and allocate highest amount of budget in the Public Sector Development Programme for electricity generation,” Khan said.
He said that his ministry will start consultation process with all the chambers and trade associations with regard to the upcoming budget for the fiscal year 2015-16 in March. “We have asked the business community to prepare recommendations on tariff rationalisation and tax policy.”
The minister also advised the Federal Board of Revenue to form simple mechanism for the businessmen and traders about filing tax returns, which could also boost the revenue collection.
Later, President FPCCI Main Muhammad Adrees, during his address to the members, demanded the government to take on board the private sector while making free trade and preferential trade agreements by taking at least one representative from FPCCI.
He also said that the ministry should provide the feasibility of establishing warehouses and bonded carrier facilities for Central Asian Countries. “Dry ports should be constructed at the border areas with Afghanistan, Iran and India,” Adrees said.