China About to Start $35 Billion of Silk Road Plan in Pakistan

Via Bloomberg, a report on China’s plans to start its investment in Pakistan as part of its Silk Road initiative:

More than three quarters of $46 billion of planned Chinese-led investment in Pakistan will be implemented by next year as part of the world’s second-largest economy’s flagship Silk Road plan.

“Out of this $46 billion, we have been so far able to energize about $35 billion,” Pakistan’s Planning, Development and Reforms Minister Ahsan Iqbal said in an interview in London. “By energizing I mean these are projects either in advanced implementation or in a stage of financially closing.”

Pakistan’s Prime Minister Nawaz Sharif is seeking to boost growth to the highest in about a decade after China announced its investment plans in the nation of about 190 million people last year. It’s part of an initiative the Chinese government calls “One Belt, One Road” that aims to revive trade across Central Asia and into Europe via a network of railways, ports and highways.

About $11 billion has been allocated to infrastructure projects including roads, with concessional loans provided at about 2 percent with payback in 20 years, along with a five-year grace period, said Iqbal, who is heading the investment plans in Pakistan. The rest has been earmarked for generating electricity, with about 11,000 megawatts expected to be added by 2018 to end the nation’s chronic power outages. 

In September, Iqbal said a further $8 billion would be provided by China and the Asian Development Bank to update Pakistan’s dilapidated railway network.

Iqbal said the government also expects to privatize state-owned power distribution companies after the 2018 elections, when Sharif will go to the polls again in a bid for a successive term. Pakistan’s growth will rise to 5.5 percent in the current year ending June helped by these investments and between 5.5 percent to 6 percent next year, he said.

Iqbal played down security concerns that have plagued the investment plans after recent attacks in the restive southwestern province of Balochistan, which is the final road toward the flagship port of Gwadar. The first consignment of Chinese goods was shipped from the port this month after trucks from China made the 3,000 kilometers journey from western Xinjiang province.

“We have raised a special force of about 9,000-plus personnel that has been specially created to augment the present security apparatus in the country,” he said. “This force will directly support, it is the sole responsibility of the Pakistani government to provide security.”

This entry was posted on Friday, November 25th, 2016 at 2:35 am and is filed under China, Pakistan.  You can follow any responses to this entry through the RSS 2.0 feed.  You can leave a response, or trackback from your own site. 

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Wildcats & Black Sheep is a personal interest blog dedicated to the identification and evaluation of maverick investment opportunities arising in frontier - and, what some may consider to be, “rogue” or “black sheep” - markets around the world.

Focusing primarily on The New Seven Sisters - the largely state owned petroleum companies from the emerging world that have become key players in the oil & gas industry as identified by Carola Hoyos, Chief Energy Correspondent for The Financial Times - but spanning other nascent opportunities around the globe that may hold potential in the years ahead, Wildcats & Black Sheep is a place for the adventurous to contemplate & evaluate the emerging markets of tomorrow.