Foreign investors are exerting pressure on Islamabad to remit dividends to their shareholders, particularly those engaged in power projects under the China-Pakistan Economic Corridor (CPEC). With outstanding dues amounting to around Rs 550 billion, this issue has become a focal point in recent discussions between Pakistani officials and foreign stakeholders.
The issue of outstanding dues, especially in CPEC power projects, has garnered significant attention during recent visits to Beijing by Pakistani officials, including Ishaq Dar, Deputy Prime Minister/Foreign Minister, and Ashan Iqbal, Federal Minister for Planning, Development, and Special Initiatives. The Private Power Infrastructure Board (PPIB) has repeatedly highlighted this concern to the State Bank of Pakistan (SBP), which faces limitations due to a shortage of dollars.
One notable example of this pressure is a letter from Qatar’s ruling family, owners of 49% shares in the imported coal power project at Port Qasim. Former Prime Minister of Qatar, Sheikh Hamad Bin Jasim Bin Jaber Al Thani, addressed Prime Minister Shahbaz Sharif, urging the payment of $450 million in receivables for the Port Qasim Electric Power Company (PQEPC), which operates a 1320-MW imported coal power plant. Al Thani emphasized the success of the project under the CPEC program but expressed frustration over the delay in dividend payments.
The PQEPC has appealed to the Pakistani government to settle its outstanding payments promptly to avoid defaulting on loan agreements and sovereign guarantees. The company’s CEO highlighted the vital role of the Port Qasim coal-fired power project in providing clean, reliable, and economical electricity to the national grid. Additionally, concerns were raised about the potential suspension of plant operations, which would have adverse consequences for both parties.
Special Assistant to the Prime Minister, Syed Tariq Fatemi, has intervened, urging concerned ministries to expedite the resolution of the issue. Prime Minister Shahbaz Sharif has directed the Power Ministry to prioritize this matter, emphasizing Pakistan’s strong bilateral ties with Qatar.
The Board of Investment (BoI), Muhammad Tahir from the SBP noted improvements in the foreign exchange reserve position, facilitating the clearance of dividend repatriations and debt obligations. The SBP has implemented a queue process for dividend repatriations by companies, ensuring a fair and orderly approach.
The pressure on Islamabad to remit dividends to foreign investors underscores the importance of addressing outstanding financial obligations, particularly in critical sectors like energy. Timely resolution of these issues is essential for maintaining investor confidence, sustaining economic growth, and fostering strong international partnerships. As Pakistani officials work to navigate these challenges, collaboration with foreign stakeholders and effective policy implementation will be crucial in ensuring economic stability and prosperity.
