The EAD additional secretary, however, revealed that the division had already negotiated with the foreign donors in that regard, but they were not interested in funding the transmission lines. PHOTO: FILE
ISLAMABAD: Foreign donors have turned down Pakistan’s request for diverting unspent loans to transmission line projects for the supply of electricity from new nuclear power plants, being set up near Karachi, to consumers.
“Donors have not expressed any interest in relation to the government of Pakistan’s plea for diverting loans to power projects,” a senior government official said while talking to The Express Tribune.
Foreign donors are taking millions of dollars in commitment charges for the loans that the government of Pakistan cannot utilise on time due to delay in execution of different projects.
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According to the official, the minister for privatisation took up the matter of unutilised loans in a meeting of the Economic Coordination Committee (ECC) on April 17 during discussion on financing the power transmission lines that would connect nuclear power plants to the national grid.
The Power Division, in its summary, called for issuance of sovereign guarantees of Rs9.84 billion for borrowing from domestic commercial banks for the projects being implemented by the National Transmission and Despatch Company (NTDC).
However, the privatisation minister called the sovereign guarantees quite substantial, suggesting that foreign loans available for different projects, which had not yet been utilised and on which the government was paying commitment charges, may be spent on such power projects. He proposed that the Economic Affairs Division (EAD) may explore the possibility of financing the power projects through donor funds.
The EAD additional secretary, however, revealed that the division had already negotiated with the foreign donors in that regard, but they were not interested in funding the transmission lines.
The Power Division emphasised that in order to ensure stable and sustainable power supply from the national grid and provision of electricity from the upcoming power projects, the enhancement in NTDC’s capacity was essential.
For the transmission of 2,200MW of electricity from K-2 and K-3 nuclear power plants in Karachi, which had cumulative cost of Rs7.5 billion, the Executive Committee of National Economic Council (Ecnec) had approved PC-1 on April 12 last year.
Apart from this, Ecnec had given the go-ahead for the high voltage direct current (HVDC) transmission line from Matiari to Lahore at a cost of Rs4.8 billion in 2016.
The Power Division pointed out that the projects sponsored by NTDC were funded through foreign loans or through borrowing from domestic banks. As no funding was available from foreign donor agencies for these projects, the NTDC board of directors had approved borrowing of Rs9.8 billion from domestic banks because of urgency of the matter.
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For the purpose, the NTDC approached 16 banks, of which six submitted expressions of interest to the tune of Rs9.8 billion to be backed by government guarantees.
Proposed term sheets of the banks had also been sent to the Ministry of Finance for approval, the Power Division said and requested the ECC to allow the issuance of sovereign guarantees once the terms and conditions were finalised and approved by the Finance Division.
After discussion, the ECC gave its approval for the issuance of sovereign guarantees.
Published in The Express Tribune, May 8th, 2018.
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