cpec: China denies asking for additional guarantees for $ 6 billion loan for Pakistan railway project


Beijing: China on Monday called unfounded reports that it requested additional guarantees from Pakistan for authorizing a huge $ 6 billion loan for a railway project and withdrawing from its commitments initial financiers owed the billions of dollars of the Sino-Pakistani Corridor economy due to the weakening financial position of its all-weather ally.

Chinese Foreign Ministry spokesman Zhao Lijian also dismissed reports that China was reneging on its initial financial pledges to Pakistan below $ 60 billion.

amid growing corruption and militant attacks.

These reports are baseless, Zhao said at a press conference here.

“I would also like to point out that in the face of the global economic recession, China’s contribution to the Belt and Road Initiative (BRI), including the CPEC, has not diminished but rather has increased unexpectedly.” , did he declare.

“In the first three quarters, China’s direct financial investment in BIS countries increased by around 30%, offering China’s support to many BIS partner countries in their efforts to combat the ‘epidemic and revive their economy,’ Zhao said.

The CPEC, which links the port of Gwadar in Pakistani Balochistan to China’s Xinjiang province, is the flagship project of China’s ambitious multibillion-dollar BRI. India has expressed concern about the project, as part of the CPEC crosses Pakistan-occupied Kashmir.

Pakistani media recently reported that China requested additional guarantees before approving a $ 6 billion loan for the Main Line-1 (ML-1) railway project due to the weakening of Islamabad’s financial situation.

The ML-1 project, which includes the dualisation and modernization of the 1,872 km railway line from Peshawar to Karachi, is a major milestone in the second phase of the CPEC.

The Express Tribune newspaper reported that China had also offered a mix of commercial and concessional loans to finance the rail project, going against Islamabad’s wishes for “cheaper loans.”

A senior Pakistani official involved in the negotiations said China raised the issue of the additional guarantee at the third joint meeting of the ML-1 finance committee on December 13, but did not make it part of the draft. minutes shared with Pakistan.

The official said China raised the issue of the additional guarantee to clarify Pakistan’s financial situation after asking for debt relief from the G-20 countries, which is only intended for the poorest countries in the country. world.

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