Clarification

ISLAMABAD: The Ministry of Finance on Saturday issued a clarification in response to a news item which appeared in a section of media that Pakistan has to pay China $40 billion on $26.5 billion CPEC investments in 20 years.

“It is clarified that infrastructure holds primary importance for economic growth and prosperity of Pakistan. Government of China has committed a total amount of $6 billion concessional loans for five CPEC infrastructure projects. These are low interest rate preferential loans with 20 years tenor and five years of grace period,” the Finance Ministry said in a press release.

“Out of these committed loans $4 billion has been received so far. In addition to this, Government of China has approved $375 million grant projects which include mega infrastructure projects like Gwadar International Airport and Gwadar hospital,” the ministry said. Similarly, it said, Eastbay Expressway project is being financed through interest-free loan of $168 million. It said the net effective rate of interest on CPEC infrastructure projects is around 2 percent per annum.

“It is clarified that these loans are scheduled to be repaid over a period of 20 years starting from 2022. The total amount to be repaid is $7.457 billion which includes principal of $6.035 billion and interest of $1.422 billion with an annualised payment of $350 million,” the statement said.

It added that the reports carried by a section of media are based on speculation and conjecture and are far away from facts.