By Emeka Blast 
China Pulls Out of CPEC Rail Project, ADB to Provide $2 Billion Lifeline
Islamabad, Pakistan – In a stunning setback for the China-Pakistan Economic Corridor (CPEC), China has withdrawn funding for the flagship Main Line-1 (ML-1) railway project, forcing Pakistan to secure a $2 billion loan from the Asian Development Bank (ADB) to keep the critical Karachi–Rohri upgrade alive, according to multiple reports from Reuters and Swarajya. The decision, announced on September 4, 2025, marks the first time a core CPEC project, part of China’s $60 billion Belt and Road Initiative (BRI) in Pakistan, will be financed by a multilateral lender, signaling a shift in the region’s infrastructure funding landscape.
The ML-1 project, a $6.7 billion initiative to modernize the 1,726-kilometer railway from Karachi to Peshawar, has been the centerpiece of CPEC since its inception in 2015. However, after a decade of stalled negotiations, China cited financial and security risks, including Pakistan’s $1.5 billion in unpaid dues to Chinese power producers and the deaths of 21 Chinese nationals in attacks since 2021, as reasons for its withdrawal, per Swarajya and The Economic Times. Haroon Sharif, chairman of the Pakistan Regional Economic Forum, told Nikkei Asia, “When China reviewed the [ML-1] financials, expected returns, and Pakistan’s payment issues, it decided against funding the project.”
The project’s cost, initially pegged at $6.8 billion, ballooned to nearly $10 billion in 2022 before being scaled back to $6.7 billion, further eroding Beijing’s confidence, per Republic World. Pakistan’s worsening fiscal position and delays in debt repayments for CPEC power projects also played a role, with China preferring Pakistan to rely on global lenders like the ADB or IMF to limit its own exposure, per Moneycontrol.
The ADB’s $2 billion loan will fund the upgrade of the 480-kilometer Karachi–Rohri section, a critical stretch for transporting copper and gold from the Reko Diq mine in Balochistan, set to begin production in 2028, per Reuters and The Economic Times. The upgrade will modernize tracks and bridges to enable faster diesel trains, connecting to a branch line from Reko Diq to the port, per MarketScreener. An ADB inspection team visited the site in July 2025 and agreed in principle to the financing, which will involve competitive bidding and stricter procurement norms—unlike earlier CPEC projects often awarded to Chinese contractors, per SSB Crack.
Tim Cribb, Reko Diq’s project director, told Reuters that the government and Barrick Gold will jointly seek funding for the branch line from the mine to Rohri, despite security concerns in insurgency-hit Balochistan, where militants frequently target rail infrastructure. The ADB has also pledged $410 million for the Reko Diq project itself, marking its first mining investment in over four decades, per Moneycontrol.
The shift to ADB funding reflects Pakistan’s urgent need to diversify partnerships amid its $130 billion debt burden, with the Reko Diq mine seen as a key economic lifeline, per The Economic Times. A senior Pakistani official told Reuters that the move was “squared with China” to maintain diplomatic ties, with both nations reaffirming their “ironclad friendship” during Foreign Minister Wang Yi’s visit to Islamabad in August 2025, per Arab News. However, analysts like Muhammad Shoaib of George Mason University noted, “ML-1 alone won’t alter the fundamentals of China-Pakistan relations,” suggesting strategic ties remain strong despite the pullback.
Social media reactions were swift, with @IndiaWarZone posting on X, “BIG BREAKING: China PULLS BACK from FUNDING Pakistan’s flagship CPEC rail project. ADB now stepping in with a $2 billion loan to keep Karachi–Rohri upgrade alive,” garnering significant attention. @MansurQr added, “ADB to fund $2B Karachi–Rohri rail upgrade after China stalls – big shift in Pakistan’s BRI railway project,” reflecting the surprise and significance of the development.
The ADB’s involvement introduces a new financing model for Pakistan’s infrastructure, with stricter oversight and open bidding, potentially reshaping how large-scale projects are executed, per SSB Crack. With the Karachi–Rohri section critical for Reko Diq’s 2028 production timeline, Pakistan faces pressure to expedite construction, though ADB sources indicate a possible delay to December 2026 for the groundbreaking, per Moneycontrol. As Pakistan navigates its debt crisis and China recalibrates its BRI commitments, the ML-1 saga underscores the complex interplay of economics, security, and geopolitics in the region.
