Neelum-Jhelum hydropower project: Pakistan in talks with China for $1.7 billion financing

Pakistan is negotiating with China for securing $1.7 billion financing for six projects, including 969-megawatt Neelum-Jhelum hydropower project. Documents obtained by this correspondent showed that the Draft Buyer Credit Loan Agreement for Neelum-Jhelum hydropower project worth $448 million was received by Pakistan from Eximbank China.
The agreement was vetted by the Law and Justice Division and concurred by the Ministry of Finance, Federal Board of Revenue (FBR) and the Ministry of Water and Power. The matter of signing of loan is pending clearance from Ministry of Commerce Peoples' Republic of China.
The loan agreement was discussed with Chinese Economic and Commercial Consular on September 24 this year who has linked the matter with the issue of Safe City Islamabad Project. At present a review petition on the Safe City project is pending with the Supreme Court and the outcome is still awaited. Another project titled 'Small and Medium Dams' worth $440 million is under negotiations between Pakistan and China. Loan applications for concessional Buyer's credit facilities to finance the project that includes Darwat Dam, Sindh, NaiGaj, Sindh and Naulong, Balochistan dams worth $75 million, $228 million and $137 million respectively have already been forwarded to China Eximbank for consideration.
The documents show that the loan application to finance the projects titled 'Reconstruction of 61-kilometre-long Nawabshah-Sang Road Project, Sindh and 'Procurement of Machinery for Irrigation Infrastructure Project' worth $20 million and $15 million respectively have been forwarded to China Eximbank for approval. In order to receive financing for Jaglot-Skardu Road project worth $454 million and Raikot-Sazin Section of the Karakoram Highway worth $282 million in the form of a soft-term loan facility, the Economic Affairs Division (EAD) has forwarded the request to China Eximbank. The approval for financing of these two projects is still awaited.