Islamabad: The development of C-5, which is the fifth unit of the Chashma Nuclear Power Generating Station, has been hit by a snag due to the reported refusal by the Ministry of Finance to furnish a sovereign guarantee, media reports said.

The Chinese partner has agreed to provide financing for up to 85 percent of the $3.7 billion nuclear power plant having a nameplate capacity of 1,200 megawatts, subject to the sovereign guarantee, reports Dawn News.

Such guarantees are meant to assure the creditor that the government will satisfy the obligation if the primary obligor — the Pakistan Atomic Energy Commis­sion (PAEC), in this case — defaults on the loan repayment, the newspaper reported.

The loan programme of the Internat­io­nal Monetary Fund (IMF) seems to have tied the government’s hands with regard to the sovereign guarantee.

As part of the 2022-23 budget, the government has laid before the National Assembly a Statement of Contingent Liabilities.

The list contains all guarantees expected to be issued during the fiscal year. The government is treating it as a ceiling to contain fiscal risks and safeguard the public debt trajectory, the newspaper reported.