China-Pakistan Economic Corridor coal projects

From Global Energy Monitor

The China-Pakistan Economic Corridor is a major development megaproject to connect multi-billion dollar Port Gwadar in southern Pakistan to China’s northwestern autonomous region of Xinjiang via network of highways, railways[1] and pipelines to transport oil and gas.[2] The economic corridor is considered central to China–Pakistan relations and will run about 3,000 km from Gwadar to Kashgar. Overall construction costs are estimated at $46 billion, with the project expected to be completed by 2030.[3][4] The Corridor is an extension of China’s proposed 21st century Silk Road initiative.[5]

Other than transport infrastructure, the economic corridor will also provide Pakistan with telecommunications and energy infrastructure. The project also aims to improve intelligence sharing between the countries.[6][7] China and Pakistan hope the massive investment plan will transform Pakistan into a regional economic hub as well further boast the growing ties between Pakistan and China.[8] Pakistan media and government call this massive investments as "game and fate changer" for region.[9][10]

During the visit of President of China Xi Jinping to Pakistan in April 2015, he wrote in an open-ed that "This will be my first trip to Pakistan, but I feel as if I am going to visit the home of my own brother." During his visit, Islamabad was dotted with slogans signboards which reads "Pakistan-China friendship is higher than mountains, deeper than oceans, sweeter than honey, and stronger than steel." [11]


Chinese Premier Li Keqiang was among the first advocates of the project; since then Chinese President Xi Jinping, former Pakistani President Asif Ali Zardari and Pakistan Prime Minister Nawaz Sharif have become strong supporters of the project. On 20 April, Pakistan and China signed an agreement to commence work on the $45 billion agreement, with $28 billion in immediate projects, and $17 billion in projects in the pipeline. $46 billion dollars is roughly 20% of Pakistan's annual GDP.

The deal will add 10,400 Megawatts to Pakistan's energy grid through coal, nuclear and renewable energy projects.[12] Also included are major upgrades to Pakistan's transport infrastructure.


The first phase involves development at Gwadar Port and the construction of an international airport. It will be carried out by 2017, with Chinese companies expected to participate. The Karakoram Highway connecting the two countries will also be widened, while the rail network between Karachi in southern Pakistan and Peshawar in the north will be upgraded. The two countries also plan a fiber-optic communications link between them.

The project received a major boost when control of Gwadar was transferred to China’s state-owned China Overseas Ports Holding in February 2013. Built by Chinese workers and opened in 2007, Gwadar is undergoing a major expansion to turn it into a full-fledged deep-water commercial port. Pakistan and China have signed agreements for constructing an international airport at Gwadar, upgrading a section of the 1,300-kilometre Karakorum Highway connecting to Islamabad and laying a fibre-optic cable from the Chinese border to the Pakistani city of Rawalpindi.[13][14] With the development of the corridor Central Asia, traditionally an economically closed region owing to its geography and lack of infrastructure, will have greater access to the sea and to the global trade network.[15] The Pak-China Economic Corridor Secretariat was inaugurated in Islamabad on August 27, 2013.[16]

On November 2014, Chinese government announced that it will finance Chinese companies to build $45.6 billion worth of energy and infrastructure projects in Pakistan as part of CPEC. Documents quoted by Reuters show that China has promised to invest around $33.8 billion in various energy projects and $11.8 billion in infrastructure projects which will be completed by 2017 at most. The deal includes $622 million for Gwadar port, According to Reuters, under the CPEC agreement, $15.5 billion worth of coal, wind, solar and hydro energy projects will add 10,400 megawatts of energy to the national grid of Pakistan.[17][18]


A total of 51 MoU's were signed in diverse sectors between China and Pakistan during the visit of Chinese president to Pakistan on 20 April 2015.[19]

Major coal-related projects under the corridor umbrella are:[20]

  • Financing cooperation agreement between the EXIM Bank of China and Port Qasim Electric Power Company (Private) Limited on Port Qasim EPC power station,
  • Gwadar Port - Completed, handed over to China for 40 years starting 2015[21]
  • Agreement on Port Qasim EPC power station between Power China and GoP.
  • Terms and conditions in favour of Sindh Engro Coal Mining Company for Thar Block II 3.8Mt/a mining project, Sindh, Pakistan, arranged by China Development Bank Corporation
  • Terms and conditions in favour of Engro Powergen Thar (Private) Limited, Sindh, Pakistan for Thar Block II 2x330MW Coal Fired Power Project, (Thar Engro power station) arranged by China Development Bank Corporation.
  • Facility agreement for the Sahiwal power station between Industrial and Commercial Bank of China Limited, Huaneng Shandong Electricity Limited and Shandong Ruyi Group
  • Cooperation agreement on Hubco power station between CPIH and Hubco Power Company.
  • Facilitation agreement on Salt Range power station between CMEC and Punjab government.


According to South China Morning Post, Beijing does not plan to use either the Asian Infrastructure Investment Bank or its Silk Road Fund to finance the US$46 billion Pakistan-China economic corridor, with money to come from both countries instead.[22]

Articles and resources


  1. uploader. "Associated Press Of Pakistan ( Pakistan's Premier NEWS Agency ) - Pak-China Economic Corridor to get high-speed railway track".
  2. "Economic corridor: Chinese official sets record straight". The Express Tribune. 2 March 2015.
  3. "China's Xi Jinping Launches Investment Deal in Pakistan". Wall Street Journal. 21 April 2015. Retrieved 21 April 2015.
  4. "China's landmark investments in Pakistan". Express Tribune. 21 April 2015. Retrieved 21 April 2015.
  5. "China's Xi in Pakistan to cement huge infrastructure projects, submarine sales BY TOM HUSSAIN Read more here:". mcclatchydc. 22 April 2015. Retrieved 22 April 2015. External link in |title= (help)
  6. "Five areas where Pakistan will benefit from the China president, Xi Jinping's visit". Economic Times. 21 April 2015. Retrieved 21 April 2015.
  7. "China's new silk road: What's in it for Pakistan?". Dawn. 21 April 2015. Retrieved 21 April 2015.
  9. "Pakistan media hails Chinese investments as 'game-changer'". India Times. 21 April 2015. Retrieved 21 April 2015.
  10. "One-on-one meeting between Mamnoon Hussain and his Chinese counterpart was followed by delegation level talks". Radio Pakistan. 21 April 2015. Retrieved 21 April 2015.
  11. "What China's and Pakistan's special friendship means". Washington Post. 22 April 2015. Retrieved 22 April 2015.
  12. "What China's and Pakistan's special friendship means". Washington Post (blog). 21 Apr 2015.
  13. "China and Pakistan pave way for 'economic corridor'". South China Morning Post.
  14. "China, Pakistan to accelerate 'economic corridor' construction".
  15. Christopher Ernest Barber, The Diplomat. "The Pakistan-China Corridor". The Diplomat.
  16. "Pak-China Economic Corridor Secretariat inaugurated in Islamabad". The News International, Pakistan. 27 August 2013.
  17. "China commits $45.6 billion for economic corridor with Pakistan". Reuters.
  18. Shannon Tiezzi, The Diplomat. "China, Pakistan Flesh Out New 'Economic Corridor'". The Diplomat.
  19. "Details of agreements signed during Xi's visit to Pakistan". Dawn. 21 April 2015. Retrieved 21 April 2015.
  20. Amer Mahmood, "Pak, China tighten knot with 51 agreements, 13 projects," Pakistan Today, 22 April 2015
  21. "China gets 40-year rights at Pakistani port".
  22. "US$46 billion Pakistan-China Corridor will not use Asian bank funds". South China Morning Post. 17 April 2015.

Related articles

External resources

Wikipedia has an article on China-Pakistan Economic Corridor. This article may use content from the Wikipedia article under the terms of the GFDL.