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Pakistan's Finance Minister in Beijing for Power Sector Debt Relief Talks
Finance Minister Muhammad Aurangzeb and Power Minister Awais Leghari in Beijing for talks on energy sector debt relief and IMF-recommended reforms.
ND
by News Desk
2024-07-25
Pakistan's Finance Minister in Beijing for Power Sector Debt Relief Talks

Finance Minister Muhammad Aurangzeb arrived in Beijing on Thursday to engage in high-stakes talks focused on securing debt relief for Pakistan’s power sector and implementing structural reforms suggested by the International Monetary Fund (IMF). Aurangzeb, accompanied by Power Minister Awais Leghari, is leading a delegation to negotiate crucial proposals, including the reprofiling of nearly $15 billion in energy sector debt.

During the visit, Aurangzeb met with his Chinese counterpart, Finance Minister Lan Fo’an, to discuss Pakistan’s ongoing efforts to address energy sector challenges. The meeting highlights the enduring economic relationship between Pakistan and China, which has historically included financial support through rollovers and disbursements on loans from China.

This visit comes in the wake of the IMF’s recent approval of a $7 billion bailout package for Pakistan, aimed at alleviating the country’s heavy debt burden. The IMF has expressed concerns about high rates of power theft and distribution losses, which contribute to the accumulation of debt within the power sector.

To address these issues, Pakistan's government is implementing structural reforms aimed at reducing “circular debt” — public liabilities that build up due to subsidies and unpaid bills — by Rs100 billion ($360 million) annually. In a statement on X, Minister Leghari emphasized the discussion of tax and energy reforms with the Chinese finance minister.

Despite these efforts, the impact of previous IMF bailouts, which included raising power tariffs, has significantly affected poor and middle-class households. The ongoing dialogue with China underscores the importance of international cooperation in managing Pakistan’s economic challenges.

China has committed over $20 billion to planned energy projects in Pakistan, reflecting its role as a key partner in addressing the country’s energy sector issues.
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Pakistan

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Finance Minister
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