Pakistan: Expansion in nuclear power generation hits snags

Islamabad, Feb. 2 -- The development of C-5, which is the fifth unit of the Chashma Nuclear Power Generating Station, has been hit by a snag due to the reported refusal by the Ministry of Finance to furnish a sovereign guarantee, media reports said.

The Chinese partner has agreed to provide financing for up to 85 percent of the $3.7 billion nuclear power plant having a nameplate capacity of 1,200 megawatts, subject to the sovereign guarantee, reports Dawn News.

Such guarantees are meant to assure the creditor that the government will satisfy the obligation if the primary obligor - the Pakistan Atomic Energy Commission (PAEC), in this case - defaults on the loan repayment, the newspaper reported.

The loan programme of the International Monetary Fund (IMF) seems to have tied the government's hands with regard to the sovereign guarantee.

The list contains all guarantees expected to be issued during the fiscal year. The government is treating it as a ceiling to contain fiscal risks and safeguard the public debt trajectory, the newspaper reported. Published by HT Digital Content Services with permission from India Blooms. For any query with respect to this article or any other content requirement, please contact Editor at contentservices@htlive.com