CPEC Power Dues Crisis Rs423b Unpaid Burden Grows
Pakistan faces a serious CPEC power dues crisis as unpaid bills reach Rs423 billion. This issue continues to strain the energy sector. It also raises concerns among investors and stakeholders. The government had planned a solution earlier. It aimed to support Chinese firms involved in power projects. However, the execution did not meet expectations.
Revolving Fund Challenges
In October 2022, authorities created a Pakistan Energy Revolving Account. The account was set up at the State Bank of Pakistan. It included an annual allocation of Rs48 billion. However, withdrawals were capped at Rs4 billion per month. As a result, payments slowed down. Therefore, the unpaid dues kept increasing over time. Officials had proposed a better plan. They suggested allocating 21% of power invoices into a revolving fund. This step could have ensured steady payments. In addition, it would have reduced financial stress on energy projects.
Breakdown of Outstanding Payments
The unpaid amounts spread across several major projects. For example, the Sahiwal coal power plant is owed Rs85 billion. Similarly, the Hub power project has pending dues of Rs64 billion. Port Qasim power plant faces unpaid bills of Rs76 billion. Meanwhile, the Thar Coal project is owed Rs54 billion. These figures highlight the scale of the issue. Other projects also face delays. Karot Power Company awaits Rs17.5 billion. Engron Powergen Thar Coal has Rs43 billion pending. Matiari-Lahore Transmission Line dues stand at Rs28 billion. Thar Energy Limited is owed Rs11.5 billion.
Impact on Energy Sector
This CPEC power dues crisis affects investor confidence. It may also slow down future energy investments. Reliable payments are essential for smooth operations. Moreover, delayed payments increase circular debt. As a result, the overall energy system becomes unstable. Therefore, timely action is necessary. The government needs a sustainable plan. For instance, improving fund flow can ease pressure. In addition, revising payment structures may help resolve the issue.
