A serious dispute has emerged as the Power Division, SBP clash over Rs. 431 billion owed to Chinese IPPs. The conflict has raised concerns about Pakistan’s commitments under the China-Pakistan Economic Corridor (CPEC) energy agreements.
The Power Division has urged the State Bank of Pakistan (SBP) to urgently release Rs. 431 billion to settle overdue payments to Chinese Independent Power Producers (IPPs). These payments are pending despite repeated commitments made at the government level.
The Power Division, SBP clash over Rs. 431 billion owed to Chinese IPPs intensified when the SBP refused to release funds, citing fiscal constraints and the need to maintain foreign exchange reserves. The Power Division, however, argues that non-payment is damaging Pakistan’s credibility with Chinese investors and threatening the country’s energy security.
The dispute is also causing delays in power generation and financial strain on Chinese IPPs. Some projects have already reduced operations, warning that prolonged delays could lead to power shortages and further economic losses.
Officials in the Power Division have expressed frustration, stating that repeated meetings with the SBP have failed to resolve the issue. They maintain that the payments are not only a legal obligation but also vital for maintaining long-term relations with Chinese energy firms.
Meanwhile, the SBP insists that it cannot unilaterally release the funds without proper authorization from the Finance Ministry. This tug-of-war has put the government in a difficult position as it tries to balance fiscal discipline with international commitments.
The Power Division, SBP clash over Rs. 431 billion owed to Chinese IPPs highlights the growing tensions between different arms of the government over financial management. Analysts warn that such conflicts may discourage future foreign investment and impact ongoing CPEC projects.
A high-level meeting is expected soon to find a solution. Until then, the situation remains uncertain, with rising pressure on the government to act swiftly and resolve the matter.
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