Pakistan and China sign US$4.8 billion nuclear power plant deal

PAKISTAN and China signed a US$4.8 billion deal on Tuesday (Jun 20) to build a 1,200-MW nuclear power plant, Prime Minister Shehbaz Sharif said, hailing the investment by a country that Pakistan views as its most dependable ally.

Work on the Chashma 5 project will begin immediately, Sharif said on state-run news channel PTV following the signing of the memorandum of understanding (MOU) between the Pakistan Atomic Energy Commission and China National Nuclear Cooperation.

“Investment from China in this project to the tune of US$4.8 billion sends a message loud and clear that Pakistan is a place where Chinese companies and investors continue to show their trust and faith,” the prime minister said.

The project will be built in the central province of Punjab. China’s support will help Pakistan make the transition away from reliance on fossil fuels. Pakistan’s total nuclear-energy production capacity rose to 1,400 MW, when the country’s sixth nuclear power plant opened two years ago. Located in the southern port city of Karachi, that 1,100-MW plant was also constructed with Chinese assistance.

Sharif, whose government is desperately struggling to stave off a balance of payments crisis, thanked the Chinese partners for offering a US$100 million discount for the latest project. It is unclear whether the new investment is part of the US$65 billion that China has pledged in infrastructure building for Pakistan under its Belt and Road Initiative.

The new project was originally planned to start a couple of years ago. Sharif expressed thanks to the Chinese side for not rescheduling costs despite the long delay. Instead, he said, the Chinese had disbursed an initial 30 billion Pakistani rupees (S$140.3 million) to start the project.