Islamabad, December 23
China has sought additional guarantees before sanctioning a USD 6-billion loan for the Main Line-1 (ML-1) railway line project in Pakistan, due to the country’s weakening financial position, according to a media report on Wednesday.
China has also proposed a mix of commercial and concessional loans to fund the rail project, going against Islamabad’s wishes of ‘cheapest lending’. The issue of additional guarantees was raised during the third joint ML-1 Financing Committee Meeting held 10 days ago (December 13).
A senior Pakistani official involved in the negotiations said China raised the additional guarantees issue during the meeting but did not make it part of the draft of minutes shared with Pakistan. The ML-1 project is a major milestone for the second phase of the China-Pakistan Economic Corridor. The official said China raised the additional guarantees issue to get clarity over Pakistan’s financial condition after it applied for debt relief from the G-20 countries, which is for the poorest nations. — PTI