Chinese loans cheaper than international lenders, says Planning Minister

ISLAMABAD, Oct.7(Gwadar Pro) - Pakistani Minister for Planning, Development and Special Initiatives Asad Umar said on Wednesday afternoon that the Chinese loans for China-Pakistan Economic Corridor (CPEC) projects were even cheaper than those executed by the other international lending agencies such as International Finance Commission (IFC), Asian Development Bank (ADB), German lending agency and other Western agencies.

Speaking at a news conference, the Planning Minister explained that the average rate PF loans for the private sector projects under the CPEC was around London Interbank Offered Rate (LIBOR) plus 4.25 percent while for the projects owned by the government, the average interest rate was about 2.4 percent.

“There are many projects that are executed through the Chinese government’s grant, so if we include the amount of grant, then the average interest rate turns to even less than 2%,” he mentioned.

Umar pointed out that the return of loan period was 20 years with a grace period of five years. He informed that the Chinese debt was around 10 percent of Pakistan’s total loans. “So the argument that the Chinese debt would create trouble for Pakistan was not correct. “It is no doubt that Pakistan is facing debt sustainability challenges but these challenges were not related to China,” he added.

The minister remarked the conditions offered by Pakistan to install power plants were not only for China but for all countries. “Only China responded to the conditions. We have already provided details with proofs that the work on CPEC was done more rapidly during last three years than the previous tenures,” he pointed out.

Umar urged the media to foil the international unjustified campaign against CPEC instead of becoming part of it. He stated that it was the era of the 5th generation hybrid warfare, when opponents were utilizing new tools to flop the opponent’s projects.

“We are witnessing the campaign against our national project under which false and baseless news are being disseminated to reverse the progress,” he said, adding “this campaign is understandable but it is quite nonsense that our local media is also becoming part of it deliberately or unintentionally by quoting the foreign media’s report against CPEC.”

Umar clarified that the concerned authorities were bound to tell all the required information to the parliament and the parliamentary committees besides. All information about tariff structure of the energy projects under CPEC were also available on the website of National Electric Power Regulatory Authority (NEPRA).

He said the International Monetary Fund (IMF) also asked for information about the projects under the CPEC which were provided by the government of Pakistan.

Umar added the government of Pakistan gives sovereign guarantee to all the foreign funded projects and all the Independent Power Producers (IPPs) whether they were from China or any other country.

Speaking on the occasion, SAPM on CPEC Khalid Mansoor said when work on Thar coal power project was initiated, no one other than China was ready to invest in this project.

He highlighted that Pakistan and China had already offered other countries to take part in CPEC so Afghanistan could also become part of it.

He pledged that the second phase of CPEC would create huge job opportunities as compared to the first phase, adding, in each industry thousands of local workers were employed.

“The newly formed Joint Working Group on Information Technology would also help creating thousands of high value job opportunities for Pakistanis,” he observed.