Pakistani Minister Awais Leghari Discusses Revising Power Contracts with China
Islamabad, Pakistan – Pakistani Minister for Power, Awais Leghari, has announced the need to revise contracts with Chinese firms involved in power production in Pakistan. He emphasized that the current terms and conditions with Chinese independent power producers (IPPs) require another look.
Leghari highlighted that Pakistan’s failure to boost industrial growth has led to significant power wastage and large bills. The country is also still repaying project loans. Local independent power plants in Pakistan face similar contract conditions as their Chinese counterparts.
The minister mentioned ongoing talks with Chinese officials to redefine debts in the power sector and convert coal-fired power plants to use locally-produced fuel. He also discussed efforts to reduce electricity prices for consumers.
Pakistan owes over USD 15 billion to China-owned power plant operators and is seeking to reschedule payments to secure an IMF bailout. The country recently reached a staff-level agreement with the IMF for a three-year USD 7 billion loan program.
Leghari stated that both China and the IMF want to see reforms in Pakistan’s economic and power sectors. He expressed confidence that these reforms would lead to substantial benefits, including reduced electricity tariffs.
Despite concerns from experts about the potential impact on Chinese investors, Leghari assured that the move to use local coal in power plants would be beneficial for all parties involved. He dismissed worries about infrastructure and coal quality, stating that there has been a positive response to the feasibility studies on coal conversion.
Leghari concluded by affirming Pakistan’s commitment to its investors and ensuring that any changes would be made with mutual consent.
Doubts Revealed
Awais Leghari -: Awais Leghari is a Pakistani politician who is currently serving as the Minister for Power. He is responsible for managing the country’s electricity and power resources.
Power contracts -: Power contracts are agreements between the government and companies that produce electricity. These contracts outline how much electricity will be produced, the cost, and other important details.
China -: China is a large country in Asia, known for its strong economy and many businesses. In this context, Chinese power firms are companies from China that help produce electricity in Pakistan.
Independent power producers -: Independent power producers are private companies that generate electricity and sell it to the government or other entities, rather than being owned by the government.
Project loans -: Project loans are money borrowed to fund large projects, like building power plants. Pakistan is repaying these loans to the lenders, which in this case include Chinese companies.
IMF bailout -: An IMF bailout is financial help from the International Monetary Fund (IMF), an organization that helps countries in economic trouble. Pakistan is seeking this help to manage its financial issues.
Coal plants -: Coal plants are facilities that burn coal to produce electricity. Pakistan is considering converting these plants to use local fuel instead of imported coal.
USD 15 billion -: USD 15 billion means 15 billion US dollars, which is a huge amount of money. Pakistan owes this amount to Chinese operators for the power projects.
Infrastructure -: Infrastructure refers to the basic physical systems of a country, like roads, bridges, and power plants. It is essential for the functioning of a society.
Coal quality -: Coal quality refers to how good the coal is for burning and producing energy. Better quality coal produces more energy and less pollution.
