CPEC Power Projects Face Mounting Payment Crisis

Chinese Independent Power Producers (IPPs) operating under the China-Pakistan Economic Corridor (CPEC) are facing severe financial strain due to unpaid dues amounting to Rs 500 billion ($1.72 billion). The Central Power Purchasing Agency-Guaranteed (CPPA-G) owes the bulk of this amount Rs 450 billion but has struggled to fulfill its obligations amid ongoing economic and foreign exchange challenges. Multiple plant operators, including Port Qasim, China Hub, and Sahiwal, have repeatedly voiced their concerns to authorities, but their appeals have largely gone unanswered.

The 660 MW Pak Matiari-Lahore Transmission Company (Pvt) Ltd.-(PMLTC) is facing similar issues, with the National Grid Company (formerly NTDC) failing to settle outstanding payments. PMLTC’s CEO, Xiong Feng, pointed out that under the legally binding Transmission Services Agreement (TSA) signed in 2018, payments should be cleared within 30 days of invoice receipt. Yet, invoices dating back to December 2024, along with those from early 2025, remain unpaid. PMLTC is now owed Rs 55.071 billion, with Rs 47.076 billion already overdue, posing a risk to the continuity of the HVDC project.

In light of these developments, PMLTC has warned of operational disruptions and mounting financial losses unless payments are made promptly. The company has urged the National Grid and CPPA-G to take immediate action. Meanwhile, the Pakistani government has released Rs 5 billion to Chinese IPPs through an Escrow Account as a temporary relief measure, with indications that further payments may be arranged ahead of Prime Minister Shehbaz Sharif’s upcoming visit to China later this year.