The Finance Ministry, sources said, gave its consent to a letter of Ministry of Energy (Power Division) dated July 13, 2018. According to an ECC decision of February 18, 2016, Finance Ministry is required to give GoP guarantee up to 22 per cent monthly invoices of CPEC related energy projects if Central Power Purchasing Agency Guaranteed (CCPA-G)/ power purchaser fails to place or maintain the required amount in the revolving account.
Accordingly, Finance Division in principle has agreed to the provision of GoP guarantee with the following condition: (i) repayment and servicing of the credit line facility shall be the sole responsibility of power purchaser i.e. CPPA-G/ PHPL and IPPs as per their mutually agreed to arrangement; and (ii) the recovery of this facility as a loan from Discos and consequently vacation of GoP guarantee shall be the collective responsibility of CPPA/ PHPL, strictly as per terms of financing.
NTDC has agreed to the rest of the proposal but expressed the opinion that clause 9.5 of the TSA titled "revolving account" NTDC should be covered by back to back arrangement which CPPA-G for timely payments to NTDC on the same terms and conditions as agreed in the TSA; otherwise, GoP should sponsor the continued operation of revolving account. Without back to back arrangement with CPPA-G or GoP sponsorship, it is difficult for NTDC to maintain the revolving account.
Chinese ambassador to Pakistan recently conveyed to the Ministry of Foreign Affairs that Beijing is adopting "go slow" policy on projects being executed under CPEC due to uncertainty of policies in Pakistan.
The overall portfolio of CPEC projects are as follows: (i) energy (IPP financing mode) estimated cost $ 34.746 billion, 72%; (ii) roads (government concessional loan) estimated cost $ 4.179 billion, 9%; (iii) rail network ML-1 (GCL under discussion) estimated cost $ 8.212 billion, 17%; (iv) Gwadar Port (Grant/GCL/ Interest free loan) estimated cost $ 780.6 million, 1.9%; and (v) Fibre Optic and Gwadar City Master Plan estimated cost $ 48 million, 0.1%. The total estimated cost is $ 47.965.6 billion, 100%.
These were categorised as: (i) prioritized energy projects, 15, capacity 11,110 MW; (ii) actively promoted projects 4, capacity 2,544 MW; and (iii) balance capacity 3,415 MW, totaling 17,045 MW. The sources said, Ministry of Foreign Affairs has been conveyed the concerns of Chinese Ambassador Yao Jing over the issue of nonpayment of dues of over $ 200 million for CPEC energy projects.