Part 5/9:

While the actual debt associated with CPEC projects constitutes less than 10% of Pakistan's total national debt, the repayment terms—maturity over 20 years with relatively low-interest rates (around 2.34%)—offer some relief. Nevertheless, the risk of default looms if revenue generation falters, as seen in other cases.

Lessons from Hambantota and Other Cases

Sri Lanka’s Hambantota port project exemplifies the potential pitfalls of BRI-led debt accumulation. Initiated in 2010 to establish a major shipping hub, the project faced rising construction costs and insufficient revenue, culminating in Sri Lanka owing $5.5 billion and eventually ceding a 70% stake in the port to China for 99 years. This incident fueled fears that similar debt-trap diplomacy could threaten other host countries.