Chinese power projects established under the China-Pakistan Economic Corridor (CPEC) are awaiting approximately Rs498 billion in outstanding payments from the Central Power Purchasing Agency-Guarantee (CPPA-G), according to a report by Business Recorder. The payment delays have placed financial pressure on several power producers, prompting companies to approach government authorities for intervention and the settlement of overdue electricity receivables. CPPA-G, which is responsible for purchasing electricity from power producers, is reportedly facing financial constraints that have affected its ability to clear the accumulated liabilities. The situation has raised concerns among project operators about debt servicing, financial sustainability and their ability to meet contractual obligations while continuing to support Pakistan’s electricity supply.
Port Qasim Electric Power Company (PQEPC), which operates a 1,320-megawatt coal-fired power plant established under CPEC, has sought government assistance over outstanding electricity payments amounting to Rs79 billion. In a letter dated September 29 and addressed to the ministers for finance, planning and energy, the company’s Chief Executive Officer, Wang Dongfeng, warned that continued delays could threaten the project’s financial sustainability. The company also cautioned that prolonged non-payment could result in defaults under its loan agreements and obligations associated with the government’s sovereign guarantee. According to the letter, the company’s receivables had reached Rs79 billion, equivalent to approximately $285.4 million, as of September 29, with payments overdue for more than six months.
The company’s Chinese and Qatari shareholders have also expressed concern about the growing outstanding amount and called for an early settlement of the dues. PQEPC has requested that the government arrange financial support for CPPA-G so that the purchasing agency can meet its payment obligations. Although the company acknowledged government efforts to facilitate payments to independent power producers, it maintained that the delays had created substantial financial pressure. The request highlights the challenges faced by power generation companies when payments for electricity supplied are not received according to expected schedules, particularly where projects carry significant financing costs and long-term repayment commitments.
PQEPC has also argued that its electricity purchase tariff is lower than the tariffs associated with oil-fired and re-gasified liquefied natural gas-based power plants. The company cited this difference as a reason why timely settlement of its receivables is important for maintaining operations and meeting financial obligations. Electricity producers generally depend on payments under their contractual arrangements to cover fuel and operating expenses, service debt and maintain their generation facilities. When receivables remain unpaid for extended periods, companies may face pressure on working capital and cash flow even if their plants continue to supply electricity to the national system. The reported situation therefore raises questions about payment discipline and the financial arrangements supporting electricity procurement in Pakistan.
The 1,320-megawatt Sahiwal coal-fired power plant is facing a similar challenge, with outstanding receivables reportedly reaching approximately Rs80 billion. The plant is operated by China Huaneng, which has repeatedly approached government authorities to seek settlement of its dues. The company has also sought intervention from the Prime Minister’s Office over a separate dispute involving deductions from capacity payments. These developments indicate that the payment issues affecting CPEC-linked power projects extend beyond a single plant and involve disputes over both outstanding electricity bills and contractual payment calculations.
According to sources cited in the report, the dispute between China Huaneng and CPPA-G concerning capacity payment deductions has remained unresolved for around four years. China Huaneng has reportedly alleged that Pakistani authorities pressured the company to accept a negotiated give-and-take arrangement as a condition for resolving the long-standing deductions. The allegation relates to the handling of contractual financial claims and reflects continuing disagreements between the power producer and the purchasing agency. The available report does not provide the government’s response to this specific allegation or details of any final settlement reached between the parties.
The outstanding payments have broader implications for Pakistan’s power sector, where the financial position of electricity purchasers and generation companies is closely connected. Delays in payments can affect the ability of power producers to meet financing obligations, maintain equipment and manage operational expenses. For projects supported by foreign investment and long-term loan arrangements, persistent receivables can also create concerns among shareholders and lenders about the predictability of contractual payments. The government’s response to the requests for intervention may therefore influence the financial outlook of the affected projects and the management of outstanding liabilities within the electricity supply chain.
The approximately Rs498 billion owed to CPEC-linked power projects represents a significant payment challenge for CPPA-G and the wider energy sector. Port Qasim Electric Power Company is seeking settlement of Rs79 billion in overdue receivables, while the Sahiwal coal-fired power plant has reported outstanding payments of around Rs80 billion. Both cases highlight the financial pressures associated with prolonged payment delays, although the reported figures relate to individual projects within the larger outstanding amount. Resolving these claims will require attention to payment arrangements, contractual disputes and the purchasing agency’s financial constraints. Further developments will depend on the government’s response to the companies’ requests and any measures introduced to facilitate the settlement of outstanding electricity payments.
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