KARACHI: Pakistan has begun talks on reallocating its power sector debt to China in parallel with talks on structural reforms proposed by the International Monetary Fund, its finance minister said at a press conference on Sunday.
He said Pakistan would consider reallocating Chinese loans to the power sector on a project-by-project basis and was considering appointing a local adviser in China for this purpose.
The finance minister stressed that this is a reprofiling and not a debt restructuring, as a reduction in the amount of debt is not an issue. Reprofiling is generally understood to involve an agreed extension of the period required for repayment.
The two bordering countries are longtime allies, and rollover and repayment of loans from China has helped Pakistan meet its external financing needs.
Pakistan is in talks with Saudi Arabia, the United Arab Emirates and China to meet its total financing needs under the IMF programme, which requires board-level approval from Islamabad.
The IMF agreed this month to a $7 billion bailout for the South Asian economy’s highly indebtedness, but concerns are growing over high rates of power theft and distribution losses that are causing debt to build up across the production chain.
Published July 28, 2024 11:37 IST
