China to invest $46bn in Pakistan’s infrastructure

China is planning to put $46bn into energy and infrastructure projects in Pakistan over the next six years. Financing will come from the Chinese government and state-owned banks, and will allow the Chinese to form commercial companies. 

Almost $34bn of the investment will go towards energy projects and will help ameliorate power shortages in Pakistan. The remaining $12bn will be spent on transport infrastructure.  

Some $15.5bn of coal, wind, solar and hydro projects will be authorised by 2017, which will add 10.4GW to the national grid. A further 6GW is due to be added by 2021; the total cost is estimated to be about $18bn.  

Pakistan presently has an installed generating capacity of 22.3GW, so the plans represent a 73% increase in the country’s power supply. 

Khawaja Asif, Pakistan’s water and power minister, said as the Chinese would form companies, they would recoup their money by selling utilities to the Pakistani consumer. He said: “Pakistan will not be taking on any more debt through these projects. This will take care of a growing demand for power by a growing economy.” 

In April this year, the two countries made plans to develop the Pakistan-China Economic Corridor. China has a close relationship with Pakistan, based partly on a mutual distrust of Indian intentions. Pakistan recently indicated that it may buy stealth fighter from China.  

China is due to invest $169bn in UK infrastructure by 2025 and $300bn in India’s infrastructure.