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China funds nuke power project in Karachi
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China has committed US$6.5 billion to finance the construction of a major nuclear power project in Pakistan’s port city of Karachi as it seeks to strengthen ties with its strategic partner, Pakistani officials have said.
Pakistani Prime Minister Nawaz Sharif broke ground on the US$9.59 billion project last month but officials have provided few details of how they plan to finance it.
Financing documents seen by Reuters showed China National Nuclear Corp has promised to grant a loan of at least US$6.5 billion to finance the project which will have two reactors with a capacity of 1,100 megawatts each.
Two members of the government’s energy team and three sources close to the deal confirmed this.
“China has complete confidence in Pakistan’s capacity to run a nuclear power plant with all checks in place,” said Ansar Parvez, chairman of the Pakistan Atomic Energy Commission which runs the civilian nuclear program. “As things stand, the performance and capacity of nuclear power plants in Pakistan is far better compared to non-nuclear plants.”
Parvez declined to give more details of the funding but said it would be completed by 2019 and each of the two reactors would be larger than the combined power of all nuclear reactors now operating in Pakistan.
As part of the deal, China has also waived a US$250,000 insurance premium on the loan, said two sources in the Energy Ministry with knowledge of the project. They declined to be identified as they are not authorized to speak to the media about the financing.
Pakistan sees nuclear energy as key to its efforts to solve power shortages that have crippled its economy. Pakistan generates about 11,000MW of power while total demand is about 15,000MW.
Blackouts lasting over half a day in some areas have infuriated many Pakistanis and sparked violent protests, crippling an economy already beset by high unemployment, widespread poverty, crime and sectarian and insurgent violence.
Under its long-term energy plan, Pakistan hopes to produce over 40,000MW of electricity via nuclear plants by 2050.
“There should be no double standards in terms of civilian nuclear deals,” Parvez said. “Pakistan has energy needs and the building of two new reactors should convince everyone that international embargoes and restrictions and Indian lobbying won’t stop us.”
China has already helped supply two nuclear reactors at the Chashma nuclear power complex in Pakistan’s Punjab region, while another two are also under construction with Chinese assistance.
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