Power Division and SBP Clash Over Rs. 431 Billion in Payments to Chinese Power Producers
A financial dispute has surfaced between the Power Division and the State Bank of Pakistan (SBP) regarding Rs. 431 billion (approximately $1.54 billion) owed to Chinese Independent Power Producers (IPPs) operating in Pakistan.
Key Points of the Dispute
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The Power Division alleges that the approved funds are stuck in Pakistani banks and have not been repatriated, despite clearance.
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In contrast, the SBP asserts that no payments are currently pending, and commercial banks have full authority to process the remittances.
This disagreement has created uncertainty around the payment process, which could potentially impact future Chinese investments under the China-Pakistan Economic Corridor (CPEC).
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Delays Threaten Investor Confidence
The payment backlog spans several months. According to the Power Division, continued delays in settling dues could undermine investor confidence and stall future energy projects backed by Chinese firms.
Meanwhile, the SBP maintains that, under existing regulations, it cannot intervene directly and has placed the responsibility on commercial banks for any delays in processing.
What’s at Stake?
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Timely payments are critical under CPEC energy agreements.
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Delays could affect bilateral relations with China.
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Pakistan’s credibility as an investment destination may be at risk if financial commitments are not met.
A Call for Resolution
With billions of rupees and strategic energy partnerships at stake, a swift and transparent resolution is essential. Ensuring smooth financial operations and honoring international agreements will be key to maintaining trust and continued foreign investment in Pakistan’s power sector.
