ISLAMABAD
Pakistan has turned down China’s demand for higher interest payments on a $576 million loan for the Neelum Jhelum hydro-electric power project in Azad Jammu and Kashmir, feeling it may have an adverse effect on national finances and foreign currency reserves, officials claim.
Prime Minister Nawaz Sharif along with his cabinet members dismissed the talk of expensive borrowing and proposed that China should be asked to charge the same interest rate as collected on a previous loan for the project.
Lenders from the Middle East have already stopped a planned $433 million loan, following the surge in cost estimates to $4.21 billion.
During the previous administration of Pakistan Peoples Party, the project cost had jumped to $2.74 billion from $1.8 billion and now the estimated cost has gone up further to $4.21 billion.
