Pakistan will pay $40 billion to China in 20 years as repayments of debt and dividends on a $26.5 bn investment under the China-Pakistan Economic Corridor (CPEC), a media report said on Wednesday.

It was widely reported earlier that the Chinese investment in CPEC was to the tune of $50 bn, but the report in Express Tribune seems to suggest that the figure is nearly half of that.

Out of $39.83 bn, debt repayments of energy and infrastructure projects amount to $28.43 bn, the daily reported, citing documents of the ministry of planning and development.

The remaining $11.4 bn will be paid in the shape of dividends to the investors, according to official estimates.

The paper reported that the figures are significantly lower than the projections made by some private institutions, primarily because the outflows have been worked out on the basis of only $26.5 bn investment.

“This suggests that unlike the claims of $50 bn to $62 bn CPEC investment, the actual investment is likely to remain half of the initially announced investment figures,” the report said.

The only major project that can materialise in the next few years is the $8.2 bn Mainline-I Project of Pakistan Railways. The project cost has not been included in these estimates.

The finance ministry also shared these estimates with the International Monetary Fund (IMF) last month, a government spokesman on CPEC affairs confirmed to the paper.

The country on an average will return $2 bn per annum to China.

These are the first comprehensive estimates of inflows that are based on projects under implementation and the outflows have been estimated on account of debt servicing of energy and infrastructure projects and dividends payments of power plants.

CPEC portfolio currently comprises energy projects, being set up by private investors, and infrastructure schemes undertaken by the government.

The government loans of $5.9 billion have been signed at an interest rate ranging from 2% to as high as 5.2%.

There are three government loans totaling $774 million that have been obtained at 5.2% rate.

Commercial loans for setting up power plants have been arranged at an interest rate of London Interbank Offered (Libor) plus 4.5%.

However, it is the return on equity, which in some cases is as high as 34.2%, that will cause an outflow of $11.3 billion.

CPEC inflows into the existing projects will dry up in 2022-23 when the country will receive $26.5 billion, according to the planning ministry’s figures.

On the basis of these inflows, Pakistani authorities have estimated that the country will return $39.83 billion to Chinese firms.