[IPP] CDB pledges loan for 1,320MW Imported Fuel Power Plant Project in Tehsil Liaqatpur

In 2014, China Development Bank provided a letter of intent (LOI) to Nishat Energy (Private) Limited to indicate that it was willing to finance the 1,320MW Imported Fuel Power Plant Project in Tehsil Liaqatpur, Rahimyar Khan District, Punjab Province. Nishat Energy (Private) Limited is a project company (special purpose vehicle) created to finance, design, implement, and maintain the 1,320MW Imported Fuel Power Plant Project in Rahim Yar Khan. The pledged loan had an interest rate of 3-month LIBOR (0.234%) + 4.5% and the maturity is 10 years. The value of the loan is unknown. The shareholders/sponsors are Nishat Power Limited (25% equity), Nishat Mills Limited (5% equity), and TBEA (70% equity). The contractor selected for project implementation was Huaneng Shandong Power, a subsidiary of the Huaneng Power International Co.Ltd. (a Chinese state-owned enterprise). However, this project was “shelved” at the request of the Pakistan government at the 8th CPEC Joint Coordination Committee meeting.

Additional details

According to multiple, official sources, the Government of Pakistan has issued sovereign guarantees in support of all loans issued by Chinese state-owned banks for independent power projects (IPPs) in Pakistan (see https://www.fmprc.gov.cn/ce/cepk/chn/zbgx/t1735166.htm and http://pk.chineseembassy.org/eng/zbgx/202110/t20211010_9558510.htm and https://www.dropbox.com/s/bmx3w2b38o7guxm/Debt%20Pricing%20of%20IPPs%20%28002%29.pdf?dl=0). As such, AidData assumes that the loan captured in this record is backed by a sovereign guarantee from the Government of Pakistan.

Number of official sources

5

Number of total sources

9