China has agreed to finance a project to develop two nuclear power plants in Karachi, a deal which will enable Pakistan to boost its power capacity by 15 per cent.
The $6.5bn loan is aimed at the K-2 and K-3 nuclear power plants which began construction last year. Pakistani officials revealed on Wednesday that loans for the project would be provided by state-owned China Exim Bank, in a deal that would be repaid over the next 20 years.
Energy Business Review reports that it could be the signal for increase investment in other power projects in Pakistan.
The country has been denied access to civil nuclear technology from the western world, notably after revelations in 2003 linking Abdul Qadeer Khan, the founder of the country’s nuclear projects, to the sale of nuclear technology to Iran, Libya and North Korea.
The agreement will be of great relief to the Prime Minister, Nawaz Sharif, whose government is struggling to cope with acute power shortages.
Sharif said China was providing a concessionary loan for the plants having combined generation capacity of 2117 MW. The repayment period will be 10 to 20 years. Talks with China for more loans for power projects are also under way.
The premier added that the government was executing a multi-pronged strategy to end power outages, but he did not give any timeframe.
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