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Reuters

The central government and banks will finance Chinese companies to build US$45.6 billion worth of energy and infrastructure projects in Pakistan over the next six years.
The Chinese companies will be able to operate the projects as profit-making entities, according to the deal signed by Prime Minister Nawaz Sharif during a visit to China this month.
At the time, officials provided few details of the projects or the financing for the deal, dubbed the China-Pak Economic Corridor (CPEC).
The deal further cements ties between Pakistan and China at a time when Pakistan is nervous about waning US support as troops pull out of Afghanistan.
Documents show that China has promised to invest about US$33.8 billion in various energy projects and US$11.8 billion in infrastructure projects.
Two members of Pakistan's planning commission, the focal ministry for the CPEC, and a senior official at the ministry of water and power shared the details of the projects.
The deal says the Chinese government and banks, including China Development Bank, and the Industrial and Commercial Bank of China, one of China's Big Four state-owned commercial banks, will lend funds to Chinese companies, which will invest in the projects as commercial ventures.
Major Chinese companies investing in Pakistan's energy sector will include China's Three Gorges Corp, which built the world's biggest hydro power scheme, and China Power International Development.
Sharif signed more than 20 agreements during his trip to China earlier this month, including US$622 million for projects related to the deepwater, strategically important Gwadar port, which China is developing.
The port is close to the Strait of Hormuz, a key oil shipping lane. It could open up an energy and trade corridor from the Gulf across Pakistan to western China that could be used by the Chinese Navy - potentially upsetting rival India.
Under the CPEC agreement, US$15.5 billion worth of coal, wind, solar and hydro energy projects will come online by 2017 and add 10,400MW of energy to the national grid, officials said. An additional 6,120MW will be added to the national grid at a cost of US$18.2 billion by 2021.
The CPEC deal also includes US$5.9 billion for road projects and US$3.7 billion for railway projects.


China commits US$45.6b for economic corridor with Pakistan

Gwadar port in the Arabian Sea could open up an energy and trade corridor from the gulf across Pakistan to western China. Photo: AFP

Business

Economy

Global Economy

The central government and banks will finance Chinese companies to build US$45.6 billion worth of energy and infrastructure projects in Pakistan over the next six years.
