A Pakistan daily – The Express Tribune has reported that the country has assured the International Monetary Fund (IMF) that it would try to seek concessions from the China-Pakistan Economic Corridor (CPEC) power plants in a bid to “remove one of the bottlenecks in finalisation of a staff-level agreement” with the global lender.
The concessions could reportedly either include reduction in profit rates on investment or loan repayment rescheduling. For Pakistan, chances of receiving concessions from China-based investors do not look too good as the political sensitivities involved in the project are enormous, said the report. The previous Imran Khan-led government had also made a similar commitment to the World Bank for a USD 400 million loan in June last year.
Belt and Road Initiative of the Chinese government has CPEC as its flagship project.
The IMF said that Pakistan will receive USD 1.7 billion tranches in the coming three to six weeks after the two sides arrived at a staff-level agreement on Wednesday.
Pakistan is faced with fast ending forex currency reserves leading to it facing multiple economic problems. The nation is talking to the IMF with regards to a bailout programme.
The Hindustan Times reported that the country has also reportedly decided to borrow 5.5 trillion Pakistani rupees from international lenders in the current fiscal year to maintain its foreign exchange reserves, repay previous loans and finance the current account deficit.
The country had earlier presented a $47 billion budget for 2022-23. The budget was tuned towards tight fiscal consolidation to assure the IMF to restart bailout payments. IMF however had insisted that additional measures were the need of the hour.