China and Pakistan agreed to a $4.8 billion contract on Tuesday to construct a 1,200 megawatt nuclear power facility, according to Prime Minister Shehbaz Sharif. Pakistan regards China as its most trusted friend.
Following the signing of the agreement of understanding between China National Nuclear Cooperation and Pakistan Atomic Energy Commission, Sharif announced on state-run news station PTV that work on the Chashma 5 project will start right away.
According to Sharif, China’s $4.8 billion investment in this project “sends a loud and clear message that Pakistan is a place where Chinese companies and investors continue to show their trust and faith.”
The Chashma 5 project will be built in the central province of Punjab. China’s support will help Pakistan make the transition away from reliance on fossil fuels.
Pakistan’s total nuclear energy production capacity rose to 1,400 mw, when the country’s sixth nuclear power plant opened two years ago. Located in the southern port city of Karachi, that 1,100 mw plant was also constructed with Chinese assistance.
Sharif, whose government is desperately struggling to stave off a balance of payments crisis, thanked the Chinese partners for offering a $100-million discount for the latest project.
It is unclear whether the new investment is part of the $65 billion that China has pledged in infrastructure building for Pakistan under its Belt and Road Initiative.
The new project was originally planned to start a couple of years ago, and Sharif expressed thanks to the Chinese side for not rescheduling costs despite the long delay. Instead, he said, the Chinese had disbursed an initial $104.53 million (30 billion Pakistani rupees) to start the project.