Six major energy power projects worth $5 billion and part of the China-Pakistan Economic Corridor (CPEC) did not receive insurance cover from Sinosure, a Chinese insurance company.
Pakistan’s Dawn News reported that Sinosure underwrote an $8 billion insurance cover to Mainline-1, a 1,733km railway line from Karachi to Peshawar.
The Pakistani outlet said that Prime Minister Imran Khan urged his Chinese counterparts to ensure that Sinosure clears about $13 billion worth of insurance cover in energy and infrastructure projects in Pakistan.
Special Assistant to Imran Khan on CPEC, Khalid Monsoor, said “we have written two separate letters to NDRC for resolution of issues hampering the financial close of six energy projects and the term sheet for ML-1 project.”
“The nature of the friendly relationship between Pakistan and China was such that their companies had never called government guarantees despite huge overdue receivables from Pakistan,” he added.
According to a report from local news publication, The News International, Pakistan is now in the throes of its worst economic crisis and will need $51.6 billion in gross external funding from 2021 through 2023 to meet its needs.
The publication broke down Pakistan’s requirements for gross external financing at $23.6 billion for 2021-22 and $28 billion for 2022-23.
“With effective micro-lockdowns, record-high remittance inflows and a supportive monetary policy, Pakistan’s economic growth rebounded in FY2021,” said Najy Benhassine, World Bank’s country director for Pakistan.
“These measures, together with the expansion of the Ehsaas program [a government poverty alleviation initiative] and support to businesses, were key to strengthening the economy and recovering from the economic fallout associated with COVID-19,” he added.
Pakistan is suffering from an economic crisis despite China pouring billions of dollars into the country to develop its infrastructure.
Because China is using Pakistan to have more direct access to the Indian Ocean, it is a supporter of the Pakistani military, which in turn assists in Pakistan’s occupation of India’s Jammu and Kashmir region.