Strategic partnership: China to fund nuclear project

Beijing-based company has promised to grant a loan of at least $6.5 billion for Karachi nuclear plant.

ISLAMABAD:

China has committed $6.5 billion to finance the construction of a major nuclear power project in Karachi as it seeks to strengthen ties with its strategic partner, officials said.

Prime Minister Nawaz Sharif broke ground on the $9.59 billion project last month but officials have provided few details of how they plan to finance it. Financing documents seen by Reuters showed China National Nuclear Corporation (CNNC) has promised to grant a loan of $6.5 billion to finance the project which will have two reactors with a capacity of 1,100 megawatts each.

Two members of the government’s energy team and three sources privy to the deal confirmed this. CNNC was not available for comment. “China has complete confidence in Pakistan’s capacity to run a nuclear power plant with all checks in place,” said Ansar Parvez, chairman of the Pakistan Atomic Energy Commission.



“As things stand, the performance and capacity of nuclear power plants in Pakistan is far better compared to non-nuclear plants.” Parvez declined to give more details of the funding but said it would be completed by 2019 and each of the two reactors would be larger than the combined power of all nuclear reactors now operating in the country.

As part of the deal, China has also waived a $250,000 insurance premium on the loan, said two sources in the energy ministry with knowledge of the project. They declined to be identified as they are not authorised to speak to the media about the financing.

Under its long-term energy plan, Pakistan hopes to produce more than 40,000 MW of electricity through nuclear plants by 2050. The United States sealed a nuclear supply deal with India in 2008, irking both China and Pakistan.

“There should be no double standards in terms of civilian nuclear deals,” Parvez said. “Pakistan has energy needs and the building of two new reactors should convince everyone that international embargos and restrictions and Indian lobbying won’t stop us.”

China’s nuclear cooperation with Pakistan has caused unease in Washington, Delhi and other capitals.

“Bilateral cooperation in the energy sector is to help ameliorate Pakistan’s energy shortages,” Chinese Foreign Ministry spokesperson Hua Chunying said on Monday. “This accords with the interests of the Pakistani people.”

“Every 1,000 megawatts of electricity produced through nuclear energy saves you $1 billion in oil imports,” Khawaja Asif, the minister for Water and Power, told Reuters. “If critics can give me alternatives and other platforms to raise money for low-cost, clean power, I’m willing to listen.”

Published in The Express Tribune, December 25^th, 2013.