A Chinese investment corporation has committed $1 billion to Pakistan Refinery Limited (PRL) for an upgrade initiative to enhance the refinery’s production capacity, Express Tribune reported on Thursday.
However, the Chinese company has emphasized that it seeks an entirely private arrangement, requesting that no government involvement be included in the deal and that PRL handles repayments in dollars independently, free from governmental control or intervention.
Currently, the State Bank of Pakistan (SBP) allows the private sector, including refineries, to retain dollars for investment purposes. Despite this, the Chinese firm has insisted that any restrictions be lifted to allow seamless dollar remittances back to China.
According to Express Tribune citing sources within the Petroleum Division, PRL has assured the Chinese corporation that it will secure the necessary dollars through exports of petroleum products, which will fund the repayment to the Chinese firm.
China Export & Credit Insurance Corporation (SINOSURE), a state-backed insurer supporting China’s foreign trade and economic cooperation, has similarly requested no government involvement regarding dollar transactions.
The upgradation project at PRL aims to double production capacity from 50,000 barrels per day to 100,000 barrels per day. PRL has already formalized an agreement with China’s United Energy Group (UEG) to undertake this substantial expansion and modernization effort.
