By Staff Reporter
ISLAMABAD: Pakistan has asked China to reprofile its debt, Prime Minister Shehbaz Sharif said on Friday, as the country strives to secure a $7 billion bailout from the International Monetary Fund (IMF) by the end of the month.
“I have written a letter to China, it’s a matter of public domain now, for debt reprofiling,” Sharif told a meeting of the federal cabinet.
Sharif’s request comes as Pakistan struggles to meet its external financing needs, with the IMF citing high energy sector debt as a major concern. Islamabad aims to reprofile over $15 billion in energy sector liabilities to alleviate repayment pressures.
Pakistan has initiated talks with China on reprofiling power sector debt, with Finance Minister Muhammad Aurangzeb saying the process would be done on a project-by-project basis. Islamabad is also seeking to appoint a local advisor in China.
China has been a key ally, providing rollovers and disbursements on loans to help Pakistan meet external financing needs. Pakistan is also in talks with Saudi Arabia and the UAE to meet IMF program requirements.
During his last visit to China, Sharif said Chinese President Xi Jinping had shown “keen interest” in his idea of using local coal to cut down imports. “I told the president that Thar coal could help the country cut down on imports and annually save $1 billion in foreign exchange,” the PM said.
Sharif added that Finance Minister Aurangzeb had “very good meetings” in China during his recent visit, noting that efforts were underway to implement structural reforms for reducing circular debt.
The IMF this month agreed on a $7 billion bailout for the heavily indebted South Asian economy while raising concerns over high rates of power theft and distribution losses that result in debt accumulating across the production chain.
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