Pakistan to seek USD 2.7 bn loan from China for CPEC project
Islamabad [Pakistan]: Pakistan has decided to seek USD 2.7 billion loans from China for the construction of package-I of the Mainline-1 project of the China Pakistan Economic Corridor (CPEC).
Citing government officials, The Express Tribune has reported that the sixth meeting of the financing committee on the ML-1 project, which includes dualization and upgrading of the 1,872 km railway track from Peshawar to Karachi, decided that Pakistan would initially request China to sanction the only USD 2.73 billion in loan out of the total estimated Chinese financing of about USD 6.1 billion.
This development comes even as Pakistan's economy has been teetering on the verge of bankruptcy for some time and the COVID-19 pandemic has made the situation even worse.
The Ministry of Economic Affairs has been directed to formally send the Letter of Intent to China next week as Beijing is expected to finalize its next year's financing plans by the end of the current month, The Express Tribune reported.
"In April this year, Pakistan had shared a term sheet for Chinese loan, seeking a 1 percent interest rate. But China has not yet formally responded to the request. They said that informally Chinese authorities conveyed that the interest rate could be higher than the one mentioned in the term sheet," the sources told Pakistan daily.
