Islamabad
\nPower Minister Awais Leghari on Saturday said the federal government has begun reviewing terms of Chinese independent power producers (IPPs) regarding debt reprofiling and the sourcing of coal.
\nLast month, Islamabad requested Beijing to convert imported coal-based projects to local coal and re-profile more than $15 billion in energy sector liabilities to create fiscal space amid difficulties in timely repayments.
\nFinance Minister Muhammad Aurangzeb said both sides had discussed conversions of Chinese power projects to local coal and how to take their technical, logistical, and financial parameters forward.
\nLeghari previously said that such a transition would benefit the Chinese-owned plants in Pakistan by reducing pressure on foreign exchange reserves, making it easier to repatriate dividends and offering a better return in dollar terms.
\nThe transition could save Pakistan more than Rs200bn a year in imports, translating to a decrease of as much as Rs2.5 per unit in the price of electricity, the power minister had said.
\nEarlier this week, Leghari, in an interview with Voice of America, said that China, like the International Monetary Fund (IMF), wanted to see broader reforms from Pakistan.
\nTo achieve that, the minister had said Pakistan had \u201calready authored and embarked upon an entire economic or power sector reform\u201d as desired by China and the IMF.
\n\u201cIt\u2019s going to be a win-win situation for everyone,\u201d Leghari had said, rejecting concerns of reduced savings for Pakistan as a result of possible higher profit margins demanded by Chinese investors.
\n\u201cUnless that isn\u2019t there, people will not invest, lenders will not give money.\u201d
\nStating that terms and conditions decided with Chinese IPPs needed \u201canother look\u201d, Leghari had affirmed there was an \u201coverwhelming response to have a look and run technical and financial feasibilities on all the aspects of coal conversion and reprofiling\u201d.
\nExpanding upon his VOA interview, Leghari told Dawn.com today: \u201cWe are not beginning but have already begun the review together with the Chinese government in debt reprofiling and coal conversion to local coal.
\n\u201cWe are reviewing and studying the overall landscape of the power sector\u2019s entire generation, including IPPs and government-owned plants. So it\u2019s not specifically one kind and one sort.\u201d
\nHe highlighted that he was currently leading a task force that was formed recently to conduct a study of the IPPs, adding that experts had also been taken on board.
\n\u201cI had clearly stated that all investments of the Chinese IPPs and the CPEC (China-Pakistan Economic Corridor) have been made under G2G (government to government) conditions.
\n\u201cIn those conditions, we have already begun reviewing them (IPP contracts) from two different angles \u2014 one is debt reprofiling and the other is of the investments they made to produce energy through imported coal,\u201d Leghari explained.
\nHe went on to add that Pakistan had already begun \u201ccoal conversion to local coal to reduce the cost of using local coal resources for Pakistan\u2019s [energy] sector\u201d.
\n\u201cSo we have begun conducting its study together with the Chinese from only these two angles. Working groups have also been established to do the same,\u201d the power minister said.<\/p>\n","protected":false},"excerpt":{"rendered":"
Islamabad Power Minister Awais Leghari on Saturday said the federal government has begun reviewing terms of Chinese independent power producers (IPPs) regarding debt reprofiling and the sourcing of coal. Last month, Islamabad requested Beijing to convert imported coal-based projects to local coal and re-profile more than $15 billion in energy sector liabilities to create fiscal […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":{"0":"post-426974","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-top-news"},"yoast_head":"\n