Chinese government pledges sellers credit for Chashma Nuclear Power Project Unit 5 in Pakistan

Project narrative

In November 2017, China National Nuclear Corporation (CNNC) and the Pakistan Atomic Energy Commission (PAEC) signed a cooperation agreement to build the fifth unit in the Chashma site at Mianwali in Punjab (C-5). Then, on June 20, 2023, an MoU was signed between CNNC and PAEC to begin construction on unit C-5. A groundbreaking ceremony was held on July 14, 2023. Pakistan's Executive Committee of the National Economic Council provided formal approval for the project on July 27, 2023. In addition to approving the project itself, the ECNEC also approved the use of a sellers' credit from an unspecified Chinese financier of PKR 820,742,990,000 (just under $3 billion) for the project. On August 8, 2023, Pakistan's Economic Coordination Committee approved the issuance of a 'gradual sovereign Guarantee' for the project. On August 16, 2023, the Executive Committee of the National Economic Council (ECNEC) also approved the project and financing scheme. However, there is no evidence yet of a sellers' credit, or other loan agreement, being signed with a Chinese creditor for the project. The total cost of the project is expected to be PKR 1,047,988,840,000. The Pakistan Nuclear Regulatory Authority (PNRA) provided PAEC with a license in December 2023, allowing for construction to formally begin. C-5 will be a Hualong One reactor with a capacity of 1,200 MW. China Zhongyuan Engineering Corporation (CZEC) was expected to help with project implementation. The estimated construction time is 81 months. The purpose of this project is to further aid Pakistan's nuclear energy strategy of reducing reliance on fossil fuels and preventing energy shortages. Data collected during pre-project site studies were to be used to create an Environment lmpact Assessment Report (EIAR), in order to ensure compliance with National Environmental Quality Standards (NEQS).