China inks deal with Pakistan to set up nuclear power plant

Context

China inked an agreement worth a whopping USD 4.8 billion with cash-strapped Pakistan to set up a 1,200-megawatt nuclear power plant as a sign of increasing strategic cooperation between the two all-weather allies.

Key-highlights

Under the project, China would build a 1,200-megawatt Chashma-V nuclear plant at Chashma in the Mianwali district of Punjab.
The Chashma-V project will be built in the central province of Punjab and will assist Pakistan in transitioning away from fossil fuels.

China-Pakistan Cooperation in Energy Sector

China and Pakistan have been strengthening their cooperation in the energy sector.
Recently, theK-3 Hualong No.1 nuclear power unit was inaugurated in Pakistan. This marked the first official delivery of China's self-built third-generation nuclear power technology to a foreign country.
The K-2 and K-3 Hualong No.1 nuclear power units in Karachi form the largest nuclear power plant in the country.

Assessing Pakistan’s financial assistance

Pakistan, which is under tremendous financial debt, is not getting multilateral loans or even bilateral assistance without the support of the International Monetary Fund (IMF).
Only China has stood fast to help Pakistan while Saudi Arabia and the UAE have also been selectively supportive.
The IMF signed a deal in 2019 to provide USD 6 billion to Pakistan on fulfilment of certain conditions.
The plan was derailed several times and the full reimbursement is still pending due to insistence by the donor that Pakistan should complete all formalities.