Pakistan CPEC power producers seek clearance of Rs498 billion in overdue payments

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CPEC overdue payments in Pakistan

Highlights

CPEC power producers await Rs498 billion in overdue payments from the Central Power Purchasing Agency-Guarantee, straining plant finances due to persistent government shortfalls.
Port Qasim Electric Power Company seeks urgent support for Rs79 billion in overdue receivables, warning of sustainability risks and possible defaults under sovereign guarantees if payments remain delayed.
Sahiwal coal-fired plant's receivables reach about Rs80 billion and China Huaneng faces prolonged unresolved disputes with CPPA-G over capacity payment deductions, aggravating sector-wide financial strain.

CPEC power dues strain plant finances

As reported by Business Recorder, Chinese power projects set up under the China-Pakistan Economic Corridor are awaiting Rs498 billion in outstanding payments from the Central Power Purchasing Agency-Guarantee, which is unable to clear the liabilities because of financial constraints, according to well-informed sources.

Representatives of the power companies have repeatedly reminded CPPA-G of its payment obligations through official correspondence, and the matter has at times reached the office of the prime minister, the sources said.

Port Qasim Electric Power Company chief executive officer Wang Dongfeng recently wrote to the ministers for finance, planning and energy, seeking intervention to secure payment of the company’s outstanding dues. The company, which operates a 1,320-megawatt coal-fired plant under CPEC, is seeking urgent government support to help settle Rs79 billion in overdue electricity payments.

In its September 29, 2026 letter, PQEPC says its outstanding receivables stand at Rs79 billion, or $285.4 million, with payments delayed for more than six months. The company warns that further delays could threaten sustainable generation and trigger defaults under loan agreements and the government’s sovereign guarantee.

Risks widen for Pakistan’s power sector

PQEPC says its Chinese and Qatari shareholders and sponsors are increasingly dissatisfied with the delayed payments and are calling for immediate action to reduce the overdue amount. The company also says that although it recognizes efforts by the government and CPPA-G to arrange funds and pay independent power producers, the prolonged delays are placing the Port Qasim project in a critical financial position.

Highlighting its cost position, PQEPC says its energy purchase price tariff is lower than that of oil-based and re-gasified liquefied natural gas-based plants. It argues that timely settlement of receivables is necessary to keep generation stable and avoid possible defaults tied to its financing arrangements.

The pressure is extending beyond Port Qasim. Outstanding receivables at the 1,320-megawatt Sahiwal coal-fired power plant have also reportedly reached about Rs80 billion, while China Huaneng has accused Pakistani authorities of pressing it into a "give-and-take" arrangement for clearing long-pending capacity payment deductions. The company has sought intervention from the Prime Minister’s Office over a dispute with CPPA-G that reportedly remains unresolved for about four years.

Our earlier article on the proposed export-oriented aluminium smelter at Port Qasim explained a plan to secure a dedicated power supply structure tied to a conditional settlement of the late payment interest dispute between CPPA-G and Port Qasim Electric Power Company. It detailed AsiaPak Investments’ back-to-back power purchase agreement concept, the timeline for approvals, and the proposed terms under which PQEPC would waive part of the claimed late payment interest if CPPA-G makes an upfront payment and clears other dues.

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