China rejects Pakistan’s request to waive CPEC dues

The latest development comes as several CPEC power projects continue to face delayed payments.

Officials say the issue has become one of the biggest financial challenges under the China Pakistan Economic Corridor, with negotiations between Pakistan and Chinese stakeholders still ongoing.

According to reports, the main disagreement involves nearly Rs170 billion in accumulated late payment surcharge. Chinese lenders and independent power producers have reportedly refused to waive these charges.

In addition, Pakistan still needs to clear about Rs260 billion in outstanding electricity purchase payments, causing Pakistan CPEC dues to rise further.

The growing Pakistan CPEC dues have also increased concerns over the country's electricity sector.

The government is now seeking up to $10 billion in low-cost foreign financing to refinance expensive debt taken for CPEC power projects developed under the China Pakistan Economic Corridor. Officials believe cheaper financing could eventually help reduce electricity tariffs.

Electricity consumers are currently paying for nearly $30.6 billion in power producer debt over the next 13 years.

Another $5.7 billion circular debt surcharge is also being recovered through electricity bills, while debt servicing now accounts for almost one-third of the average electricity tariff.

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Some of the largest unpaid amounts relate to CPEC power projects, including Rs85 billion owed to the Sahiwal Coal Power Plant, Rs76 billion to Port Qasim Power Plant, Rs64 billion to Hub Power Plant, Rs54 billion to Thar Coal Block-I Power Generation Company, Rs43 billion to Engro Powergen Thar, Rs28 billion to the Matiari-Lahore Transmission Line, Rs17.5 billion to Karot Power Company and Rs11.5 billion to Thar Energy Limited.

The rising CPEC dues have become a key concern for policymakers, as resolving Pakistan CPEC dues remains essential for improving the financial health of the energy sector.

Reports suggest China rejects CPEC dues waiver requests over the disputed surcharge, while discussions continue to find a mutually acceptable solution. Officials hope future negotiations under the China Pakistan Economic Corridor framework will help resolve the issue without disrupting ongoing CPEC power projects.