Pakistan to demand debt relief on China’s BRI projects: Bloomberg
Pakistan is considering asking China for payment relief for Beijing-funded power projects over the past eight years in a bid to ease debt repayment, Bloomberg reported on Tuesday.
According to the report which points out that Pakistan is the “last” developing country struggling to repay its debt under the Belt and Road Initiative (BRI), Chinese and Pakistani officials discussed a easing of debt repayment terms for a dozen power plants. . However, the government has not yet made a formal request to Beijing on this matter.
The international newspaper reported that the parties have examined Beijing’s willingness to stagger debt payments, rather than slash stock returns.
“A huge construction of Chinese-funded power plants in Pakistan, which was originally intended to solve its electricity shortages, has resulted in a surplus that Islamabad cannot afford. China’s initiative-funded infrastructure projects in other developing countries, such as Sri Lanka and Malaysia, have suffered from problems ranging from heavy debt to corruption, ”the report adds.
Meanwhile, China has dismissed criticism from the United States that the initiative leads to debt traps while acknowledging that countries have had difficulty repaying their loans due to the pandemic-induced global recession. .
Citing a person familiar with the matter, the report claimed that Pakistan will formally request the postponement of debt payments to China, as well as other power plants that are part of the latest energy policy after reaching agreements. with these local power producers to reduce electricity tariffs.
The BRI, which was launched in 2013 as President Xi Jinping’s flagship foreign policy initiative, aims to build infrastructure and strengthen China’s influence in the world. Most of the 138 countries that have officially joined the BIS are developing countries, many of which have the lowest credit scores in the world.
China publishes few financial details on BRI infrastructure projects. But RWR Advisory, a Washington-based consulting firm, estimated that the total loans announced by Chinese financial institutions to BRI projects since 2013 were $ 461 billion. Even taking into account the low completion rates of announced projects, such a sum makes the BRI by far the largest development initiative in the world.
According to the Johns Hopkins School of Advanced International Studies, several of the countries that have asked Beijing for debt relief are in Africa, where the Chinese government, banks and entrepreneurs loaned $ 143 billion between 2000 and 2017.