There are three main kinds of financial liabilities involved in CPEC:
1- Fiscal Liabilities These include
- all debt servicing liabilities (interest payments and debt repayments) brought on by local investments financed through Chinese commercial or government-to-government loans, and
- returns on equity guaranteed by the Government of Pakistan (GoP).
2- Foreign Exchange Liabilities (other than imports) These include:
- CPEC related debt liabilities (loans repaid to Chinese donors in USD), and
- repatriation of profits in the case of FDI projects.
3- Contingent Liabilities These include potential liabilities arising from unforeseeable drops in profit rates of FDI (particularly energy) projects below the amount guaranteed by the GoP (Refer GoPs sovereign guarantee agreement).
