The Pakistan Atomic Energy Commission (PAEC) has requested for Rs 29 billion in the upcoming budget for three nuclear power reactors--Chashma-2-3 and 4--to be set up with Chinese assistance, Business Recorder has learnt.
The request of PAEC will be tabled before the Annual Plan Co-ordination Committee (APCC) scheduled to meet with Deputy Chairman of Planning Commission in the chair on May 21. The APCC is expected to recommend Rs 300 billion as total size of Public Sector Development Programme 2010-11.
According to sources, PAEC is seeking Rs 5 billion for the ongoing Chashma (C) 2 and Rs 24 billion for Chashma 3 and 4 projects with all three having a capacity of 320 MW each. The government is already working on Chashma 2 with Chinese assistance. In budget 2009-10, government had allocated Rs 8.6 billion for Chasha 2 with a foreign exchange component of Rs 2.7 billion; while the local currency component of Chashma 3 and 4 allocated in the ongoing years budget was Rs 4.5 billion. The total cost of Chashma 3 and 4 is estimated at $1.912 billion.
According to sources, PAEC is unlikely to get more than Rs 12 to Rs 14 billion for these three nuclear power plants in the upcoming budget as Finance Ministry has already notified a ceiling of Rs 18.5 billion for the entire PAEC budget - one billion rupees less than what was allocated in budget 2009-10.
Pakistan has already entered into inter-government framework agreement with China to establish two nuclear power projects Chashma 3 and 4 of 320 megawatts each. Under a deal, China would provide a loan, technology and installation facilities to implement the project. The federal cabinet has granted approval to inter-government framework agreement with China in its meeting held on March 24.
Sources said that under the agreement, China would provide 82 percent of the total $1.912 billion financing to Pakistan- a 20-year soft loan, with an eight-year grace period.
In a bid to guarantee financing for the two plants chashma 3 and 4, the inter-government framework agreement requires both countries to enter three loan agreements. Under the first loan agreement, Pakistan will get $104 million with an annual interest rate of 1 percent, management fee of 0.2 percent and a commitment fee of 0.2 percent.
Under the second preferential buyer credit agreement, Pakistan will receive $1 billion with an annual interest rate of 2 percent, a management fee of 0.2 percent and a commitment fee of 0.2 percent.
Under the third buyer's credit agreement, China will provide $474 million with an annual interest rate of 6 percent, a management fee of 0.75 percent, a commitment fee of 0.5 percent and an insurance rate of 7 percent. However, according to the inter-government framework agreement, the annual composite interest rate would not exceed three percent in any case.
Beijing has already included financing these two nuclear power plants in its financial year development programme (FYDP) 2009-10 agreed between the two countries in a meeting of Pak-China Technical Working Group (TWG) held on July 22- 24, 2009 in Islamabad.
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