Bhaijaan
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Crucial development and perhaps a sign of shifting geopolitical dynamics in the region. This is actually not bad in a way for Pakistan. I have been an advocate for Pakistan to diversify its options geopolitically and economically to truly build a robust economy. But no doubt this is China subtly showing the extents to which it’s willing to put up with Pakistan dictatorship.
China has withdrawn from financing the Karachi–Rohri section of the ML-1 project. The primary reasons include:
• Security risks: Multiple attacks since 2021 have resulted in casualties among Chinese workers.
• Unpaid dues: Pakistan has failed to clear approximately $1.5 billion owed to Chinese power producers.
• Escalating costs: Project estimates jumped from USD 6.8 billion to USD 9.85 billion, before being trimmed back to USD 6.7 billion, creating uncertainty.
⸻
2. ADB’s $2 Billion Loan
The Asian Development Bank (ADB) has entered advanced discussions with Pakistan to provide a USD 2 billion loan to finance the Karachi–Rohri upgrade. This would be the first time a core CPEC project is financed by a multilateral institution instead of China.
Unlike China’s concessional loans, the ADB loan is expected to:
• Be based on market interest rates
• Require competitive bidding
• Ensure greater transparency and accountability
⸻
3. Strategic and Economic Implications
The Karachi–Rohri segment of ML-1 is strategically significant:
• It serves as a backbone for national rail connectivity.
• It will be critical for transporting ore from the Reko Diq copper mine.
ADB’s participation may set a precedent for future infrastructure projects in Pakistan by shifting financing from bilateral arrangements with China to multilateral institutions. This could diversify Pakistan’s funding sources but also reduce its reliance on a single partner.
Source :
Reuters – ADB to back Pakistan rail upgrade as China financing stalls (Aug 22, 2025)
China has withdrawn from financing the Karachi–Rohri section of the ML-1 project. The primary reasons include:
• Security risks: Multiple attacks since 2021 have resulted in casualties among Chinese workers.
• Unpaid dues: Pakistan has failed to clear approximately $1.5 billion owed to Chinese power producers.
• Escalating costs: Project estimates jumped from USD 6.8 billion to USD 9.85 billion, before being trimmed back to USD 6.7 billion, creating uncertainty.
⸻
2. ADB’s $2 Billion Loan
The Asian Development Bank (ADB) has entered advanced discussions with Pakistan to provide a USD 2 billion loan to finance the Karachi–Rohri upgrade. This would be the first time a core CPEC project is financed by a multilateral institution instead of China.
Unlike China’s concessional loans, the ADB loan is expected to:
• Be based on market interest rates
• Require competitive bidding
• Ensure greater transparency and accountability
⸻
3. Strategic and Economic Implications
The Karachi–Rohri segment of ML-1 is strategically significant:
• It serves as a backbone for national rail connectivity.
• It will be critical for transporting ore from the Reko Diq copper mine.
ADB’s participation may set a precedent for future infrastructure projects in Pakistan by shifting financing from bilateral arrangements with China to multilateral institutions. This could diversify Pakistan’s funding sources but also reduce its reliance on a single partner.
Source :
Reuters – ADB to back Pakistan rail upgrade as China financing stalls (Aug 22, 2025)
