Chinese IPPs Demand Rs. 498 Billion in Unpaid Dues

Power projects in China, established under the China-Pakistan Economic Corridor (CPEC), are currently awaiting Rs. 498 billion in unpaid dues from the Central Power Purchasing Agency-Guarantee (CPPA-G), according to sources. The issue has been repeatedly brought to the Prime Minister’s Office, with Port Qasim Electric Power Company (PQEPC) recently requesting government assistance to recover its outstanding payments.

Port Qasim's Chief Executive Officer, Wang Dongfeng, wrote to finance, planning, and energy ministers, highlighting that its power plant, a 1,320-megawatt coal-fired facility, is awaiting Rs. 79 billion. The overdue receivables have persisted for over six months, and PQEPC warns that continued nonpayment could jeopardize the project's financial stability, electricity generation, and default under loans backed by the government's sovereign guarantee.

The company's Chinese and Qatari shareholders have also expressed concern and called for prompt action. Similar financial pressures are faced by the Sahiwal coal-fired power plant, owned by China Huaneng, with outstanding receivables around Rs. 80 billion. Despite CPPA-G's efforts to arrange funding and make payments, the overdue amounts have placed significant financial pressure on Port Qasim and Sahiwal, which together account for approximately Rs.

159 billion in reported receivables. While no default on loans or suspension of electricity generation has been reported, the delay in payments poses risks to project operations, loan repayments, and government-backed guarantees.