Pakistan not asked to renegotiate CPEC IPPs deals: IMF

ISLAMABAD: The International Monetary Fund (IMF) has not asked Pakistan to renegotiate deals with Independent Power Producers (IPPs) for the China-Pakistan Economic Corridor (CPEC).

“The IMF did not ask Pakistan to renegotiate CPEC’s IPP contracts. These claims are simply untrue. Rather the IMF supports the government’s multi-pronged strategy to restore energy sector viability, which shares the burden of restoring viability across all stakeholders — the government, producers and consumers,” the IMF’s Resident Chief in Pakistan Esther Pervez Ruiz stated in a statement on Thursday.

The sources said that the outstanding amount of circular debt for Chinese IPPs ballooned to over Rs300 billion and Prime Minister Shehbaz Sharif approved Rs50 billion to clear the first instalment of the piling up liability. The ECC has also considered another instalment of Rs50 billion out of the outstanding liability. The government is also considering making a revolving fund functional for payment to Chinese IPPs agreed upon at the time of CPEC’s finalisation.

The IMF has sought all details of repayments to all the IPPs and found that there was nothing unusual happening on the account of payment to Chinese side. It has resulted in satisfying the IMF and the latest statement of IMF’s Resident Chief will help both sides move towards striking a staff-level agreement.

The News reported on June 9, 2022 that the IMF side also expressed concerns over the outstanding repayments to Chinese Independent Power Producers (IPPs) under the CPEC as the PM approved Rs50 billion out of total outstanding dues of Rs300 billion, so the Fund is asking about the repayment schedule on this account.

Now after the government shared relevant details, the Fund is satisfied that there is nothing unusual related to repayments to Chinese IPPs.