ISLAMABAD: Chinese companies have ruled out possibility of renegotiating power purchase contracts.

In background briefing to private news agency, representatives of three large Chinese companies said that matter of whether to restructure energy debt should be decided between Chinese banks and Pakistani authorities.  However, they ruled out possibility of renegotiating their own terms and conditions, which were related to their profits and idle capacity payments and agreed under Power Purchase Agreements. Finance Minister Muhammad Aurangzeb leaves Wednesday to meet with Chinese authorities to seek an extension in repayment of debt that government of Pakistan and Chinese companies have taken from Chinese financial institutions for setting up power plants.

Pakistan had taken debt to set up nuclear power plants, while Chinese companies took these loans for power plants setup under CPEC.  Power Division official said that estimated value of outstanding debt was around $ 17 billion for both nuclear plants and CPEC energy projects. Pakistan has prepared proposal for up to 8 years extension in energy debt repayments, changing lending currency from dollar to Chinese Yuan and seeking cut in interest rates, according to Finance Ministry sources. If accepted by Chinese authorities, cumulative impact of these concessions could be around Rs 6 to Rs 7 per unit reduction in prices. Only the impact of Chinese power plants is Rs 3 to Rs 4 per unit, sources said.