ISLAMABAD: With Prime Minister Shehbaz Sharif’s upcoming visit to China fast approaching, Chinese Independent Power Producers (IPPs) under the China-Pakistan Economic Corridor (CPEC) have intensified calls on the government to clear their mounting receivables, which have now reached around Rs475 billion, well-placed sources confirmed to Business Recorder.
CEOs of Chinese CPEC IPPs have written multiple letters to senior government officials, also marking copies to the Chinese Ambassador in Islamabad, who is actively engaging with Pakistani authorities to finalize the agenda of the Prime Minister’s meetings with Chinese leadership.
In a recent letter, Wang Dongfang, CEO of Port Qasim Electric Power Company (PQEPC), voiced serious concern over prolonged delays in tariff payments by the Central Power Purchasing Agency-Guaranteed (CPPA-G). He noted that the 1,320 MW Port Qasim coal-fired project—one of CPEC’s flagship ventures—has reliably supplied affordable power to the national grid, yet its receivables have swollen to Rs81 billion ($286.9 million) as of July 31, 2025, with payment delays stretching beyond six months.
Wang cautioned that shareholders and sponsors from China and Qatar have expressed strong dissatisfaction over the backlog and warned that under Section 9.10 of the Power Purchase Agreement (PPA), PQEPC is entitled to suspend operations without liability for liquidated damages. He stressed that such a step would be a “lose-lose” situation, undermining energy security and potentially triggering loan defaults despite the project’s tariff being more competitive than oil and RLNG-based plants.
Calling on Finance Minister Senator Muhammad Aurangzeb and Planning Minister Ahsan Iqbal to intervene, Wang urged urgent measures to ease the liquidity crunch and arrange payments through CPPA-G to avert a crisis.
Government officials, when approached for comment, admitted limited fiscal space but maintained that payments to CPEC IPPs are being processed via an escrow account, with Rs5 billion earmarked monthly for disbursement.
Story by Mushtaq Ghumman
