Pak’s assurance to IMF on CPEC projects to clear key agreement: Report

Pakistan has assured the International Monetary Fund (IMF) that it would try to seek concessions from the China-Pakistan Economic Corridor (CPEC) power plants in a bid to “remove one of the bottlenecks in finalisation of a staff-level agreement” with the global lender, local daily, the Express Tribune, has reported.

The concessions may reportedly include either reduction in the profit rates on investment or rescheduling the loan repayments. However, the chances of receiving concessions from the Chinese investors are believed to be dim because of the political sensitivities involved in the process, the report highlighted. The previous Imran Khan-led government had also made a similar commitment with the World Bank for a USD 400 million loan in June last year.

The CPEC is the flagship project of the Belt and Road Initiative of the Chinese government.

Meanwhile, after reaching a staff-level agreement on Wednesday, the IMF said that Pakistan will receive USD 1.7 billion tranches in the coming three to six weeks.

The country has been dealing with multiple economic challenges with foreign exchange reserves said to be drying up fast. The country has been in talks with the IMF to revive bailout programme.

Pakistan has also reportedly decided to borrow 5.5 trillion Pakistani rupees from international lenders in the current fiscal year to maintain its foreign exchange reserves, repay the previous loans and finance the current account deficit.

Earlier, the country had unveiled a $47 billion budget for 2022-23, aimed at tight fiscal consolidation in a bid to convince the IMF to restart the bailout payments. However, the global lender had said that additional measures were needed to bring Pakistan’s budget in line.