Pakistan is close to finalizing a $1.6 billion financing agreement with China for upgrading the Thakot-Raikot section of the Karakoram Highway, sources familiar with the negotiations informed ProPakistani.

The Finance Ministry, Planning Commission, and Economic Affairs Division are engaged in discussions with Chinese officials to secure long-term funding for the project to enhance transportation efficiency, and boost economic activity along this route.

Sources said the upgrade will include high-quality bridges, reinforced slopes, and bypasses to ease traffic around densely populated areas. A joint venture between a Chinese company and a Pakistani firm is likely to be awarded the contract under the China-Pakistan Economic Corridor (CPEC).

Sources added that Prime Minister Shehbaz Sharif has been briefed on the project’s progress. A high-level Pakistani delegation might travel to China to finalize the agreement.

As part of CPEC’s expansion, China is also expected to sign four additional contracts with Pakistan, including partnerships in agriculture and information technology, as part of broader efforts for CPEC Phase II.