Chinese IPPs Push for Clearance of Rs. 475 Billion Dues Ahead of PM’s Visit to China
As Prime Minister Shehbaz Sharif prepares for his upcoming visit to China, Chinese Independent Power Producers (IPPs) under the China-Pakistan Economic Corridor (CPEC) have escalated pressure on the Pakistani government to clear their mounting receivables, which now total Rs. 475 billion.
Delayed Payments Spark Concerns
The CEOs of various Chinese CPEC IPPs have sent multiple letters to senior government officials, highlighting the delay in payments. Copies of the letters were also shared with the Chinese Ambassador to Pakistan, who is actively engaging with high-ranking Pakistani officials to ensure the issue is resolved before the Prime Minister’s meetings with Chinese leadership.
Major Concern from Port Qasim Electric Power Company
One of the most vocal concerns came from Wang Dongfang, CEO of Port Qasim Electric Power Company (PQEPC), which operates the 1,320 MW Port Qasim Coal-Fired Power Project under CPEC. Wang expressed alarm over the growing backlog of tariff payments from the Central Power Purchasing Agency-Guaranteed (CPPA-G).
According to Wang, the outstanding dues to PQEPC have reached a staggering Rs. 81 billion (approx. $287 million) as of July 31, 2025. The delay in payments has extended beyond six months, and Wang warned that the situation could worsen if immediate action is not taken.
Urgent Action Required to Avoid Power Plant Shutdown
Wang emphasized the critical nature of the issue, warning that if payments are not made soon, PQEPC may be forced to suspend operations without incurring penalties under the Power Purchase Agreement (PPA). Such a move would have significant repercussions for Pakistan’s already strained energy sector.
“Suspension of operations would result in a lose-lose outcome for both sides,” Wang noted. He further emphasized that timely payments are crucial to ensure the sustainability of power generation and avoid defaults under Pakistan’s loan agreements and sovereign guarantees.
Vital Role of PQEPC in Pakistan’s Energy Mix
Wang also pointed out that the Energy Purchase Price (EPP) tariff offered by PQEPC is more competitive compared to other oil- and RLNG-based power plants, making it an essential part of Pakistan’s energy mix.
