China has agreed to extend by two years the deadline for repaying Pakistan’s publicly guaranteed debt of more than $2 billion.
This was approved by the federal cabinet’s Economic Coordination Committee (ECC) at a meeting on Thursday. The committee, chaired by Finance Minister Ishaq Dar, reviewed and later approved the updated conditions of the contract signed between Pakistan and China, according to the Express Tribune.
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The Export-Import Bank of China recently agreed to contribute $9.5 billion to the financing of two nuclear power reactors in Karachi. According to senior officials, the $6.5 billion debt is publicly guaranteed, and repayments of more than $2 billion are due in two years, which China has agreed to reschedule.
So far, no formal comment has been published by the Ministry of Finance regarding the ECC’s acceptance of the new arrangement with China.
According to the International Monetary Fund’s most recent Country Report, China is by far Pakistan’s largest rescuer, with $23.87 billion in bilateral and $5.71 billion in commercial assistance.
Pakistan’s total external debt stock was $100.52 billion at the end of December 2022, with China financing $29.59 billion.
