Reportedly, China has offered to finance the entire Gwadar LNG terminal and pipeline project. For Gwadar LNG project and pipeline project, the government had set aside PKR 184 billion, Pakistan’s portion of the finances however, it would seem that the money will soon be freed for use elsewhere. Originally, China was to finance 85% of the $2 billion required for the Gwadar LNG project with the remaining 15% to be provided by Pakistan. For that purpose, Gas infrastructure Development Cess (GIDC) made efforts to gather the necessary funds.
While it may sound like a good news, the move from China came after Pakistan failed to gather the necessary funds and later apply for a loan to cover the shortage. It was reported, that the a percentage of the funds collected by GIDC, approximately PKR 183.36 million, was spend on other development projects including Metro and Orange Line. Given that the delay in fund collection was causing a major setback in the timelines, China offered to finance 100% of the Gwadar LNG terminal and pipeline project.
This particular project was chalked up in light of the fact that gas shortage was soon to become a credible threat to the Pakistan’s needs. The project was originally proposed as alternative to ever-elusive Iran-Pakistan pipeline because at the time, Tehran was under US sanctions. That however, is now in the past. With both projects under development, Pakistan should soon be able to meet its gas needs.
With 100% financing offer on the table, China is now responsible for project implementation and providing complete finances for the project. It is currently unclear as to whether the terms for the added 15% will be the same as for the original 85% or harsher.You can follow us on Facebook, Twitter, or Google+ for more updates. Otherwise fill in the subscription box above, or subscribe to our RSS Feed.