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ECC okays $3b loan guarantee for N-plant

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Pakistan on Tuesday approved issuing $3 billion worth of sovereign guarantees against a Chinese loan for a nuclear power plant and stamped an operator-favoured State Support Agreement for the outsourcing of the Islamabad International Airport.
The Economic Coordination Committee (ECC) of the outgoing cabinet took these decisions but left a decision to import at least one million metric tons of wheat for the caretaker government.
Finance Minister Ishaq Dar, who may have some role in the interim setup, chaired the ECC meeting. After the meeting, the Ministry of Finance stated that the Pakistan Atomic Energy Commission submitted a summary regarding issuing the government’s guarantees for Chashma Nuclear Power Project Unit -5 (C-5).
“The ECC decided to allow the issuance of gradual sovereign Guarantee for the Chasma C-5 project within the IMF programme”.
According to the terms of the agreement, China will provide the 21.3 billion RMB loan or $3 billion for 20 years. China will charge a 3 per cent interest rate, and the repayments will start after eight years.
However, Pakistan is required to issue sovereign guarantees for the repayment of the Chinese debt along with the interest rate.
As per the Financing Agreement, a sovereign guarantee issued by the government of Pakistan to guarantee the payment obligations of PAEC is a prerequisite for validating the C-5 contract by China.
China National Nuclear Corporation Overseas Limited (CNOS) has offered a Supplier Credit of 21.3 billion RMB for constructing the 1200 megawatts nuclear-energy-fired power plant.

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