Power Minister Awais Leghari’s blunt admission that negotiations with Chinese power producers under the China-Pakistan Economic Corridor (CPEC) have yielded “no sufficient outcome” underscores a growing rift in Islamabad’s energy diplomacy. While the government has secured over Rs3.5 trillion in savings through renegotiated deals with non-CPEC independent power producers (IPPs), the lack of progress on Chinese-linked projects has left policymakers scrambling to balance fiscal discipline with geopolitical obligations. This stalemate is not just a bureaucratic hurdle—it’s a microcosm of Pakistan’s broader struggle to reconcile its energy needs with the complex realities of its most critical foreign partnership.
The CPEC Conundrum: Why Chinese Power Deals Remain Stuck
The deadlock stems from the unique framework governing CPEC energy projects, which were designed to attract foreign investment during a period of global economic uncertainty. Unlike private IPPs, which operate under market-driven contracts, CPEC projects are bound by government-to-government agreements that prioritize long-term guarantees for Chinese investors. “The structure of these deals is inherently inflexible,” explains Dr. Ayesha Siddiqui, an energy economist at the Lahore School of Economics. “China’s insistence on debt-reprofiling and repayment terms tied to political assurances has left little room for negotiation.”
Leghari’s remarks highlight the tension between Islamabad’s fiscal constraints and its desire to maintain CPEC’s momentum. The minister noted that renegotiating CPEC agreements would require “staying within government-to-government arrangements,” a phrase that hints at the delicate dance between sovereignty and dependency. Here’s compounded by the fact that many CPEC projects, such as the 1,100MW Karot Hydropower Station, were developed under a 2013 framework that predated Pakistan’s current energy crisis. A 2021 audit revealed that 60% of CPEC energy projects operate under fixed tariffs, limiting the government’s ability to adjust rates without renegotiating with Beijing.
Ripple Effects on Pakistan’s Energy Policy
The impasse has significant implications for Pakistan’s energy strategy. While the government has successfully reduced tariffs through renegotiations with private IPPs—cutting the national average from Rs53.04 per unit in 2024 to Rs42.26 in 2026—CPEC projects remain a drag on the system. The Neelum-Jhelum Hydropower Project, for instance, has been offline for 18 months due to design flaws, costing the state billions in lost revenue. “This is a $500 million time bomb,” says former Energy Secretary Tariq Khokhar. “When you rely on a single source for cheap power, its failure disproportionately impacts the entire grid.”
The minister’s emphasis on solar self-generation—projected to expand to 50,000MW by 2036—reflects a strategic pivot away from centralized, state-backed projects. However, the shift from net-metering to net-billing has raised concerns among small-scale solar adopters. “The new system penalizes those who generate excess power,” argues Muhammad Asif, a Lahore-based renewable energy advocate. “This could stifle the grassroots solar boom that’s critical for reducing grid dependence.”
Subsidy Reforms and the Battle for Public Trust
Leghari’s claims of a “fake campaign” against subsidy reforms reveal the political tightrope the government is walking. By introducing a QR code registration system to target subsidies for low-income consumers, the ministry aims to curb waste in a sector plagued by decades of mismanagement. Yet, the policy’s exclusion of households using solar power to bypass the grid has sparked controversy. “This is a technical loophole that could exclude millions,” warns Dr. Sanaullah Khan, a public policy researcher. “The government needs to clarify how it will support off-grid solutions without penalizing them.”
The minister’s assertion that subsidies will now be “verified through public consultations” is a nod to transparency, but critics argue it lacks specificity. A 2025
