ISLAMABAD: Pakistan’s Press Information Department (PID) has clarified that China Pakistan Economic Corridor (CPEC) financing is concessional.
Reference news appeared in a section of media reporting Pakistan has to pay China $40 billion on $26.5 billion CPEC investments in 20 years.
It is clarified that infrastructure holds primary importance for economic growth and prosperity of Pakistan. Government of China has committed a total amount of $6 billion concessional loans for 5 CPEC infrastructure projects.
These are low interest rate preferential loans with 20 years tenor and five years of grace period. Out of these committed loans $4 billion has been received so far. In addition to this, Government of China has approved $375 million grant projects which include mega infrastructure projects like Gwadar International Airport and Gwadar hospital.
Similarly, Eastbay Expressway project is being financed through interest free loan of $168 million.
The net effective rate of interest on CPEC infrastructure projects is around 2% per annum.
It is clarified that these loans are scheduled to be repaid over a period of 20 years starting from 2022. The total amount to be repaid is $7.457 billion which includes principal of $6.035 billion and interest of $1.422 billion with an annualized payment of $350 million.
The reports carried by a section of media are based on speculation and conjecture and are far away from facts, PID added.