Behind the Chinese-Pakistani Nuclear Deal The prime minister of Pakistan, Nawaz Sharif, announced this week that China would help build two nuclear power reactors in Karachi, a port city with chronic electricity shortages. The deal marks a big step in nuclear energy cooperation between China and Pakistan, but financing and other important parts of the project have yet to be settled. Here is an explanation: What Reactors Does Pakistan Want? The project calls for Chinese companies to help build two new models of ACP-1000 nuclear reactors in Karachi. The ACP-1000 reactor was developed by the China National Nuclear Corporation and can produce 1,100 megawatts of power. Much of Pakistan is afflicted by blackouts, and many citizens have no electricity at all. Adding about 1,000 megawatts of power to the grid there could, in theory, supply enough electricity for more than two million households, according to the United States Agency for International Development's estimates for its power projects in Pakistan. "If Pakistan wants to grow its economy, it's going to need stable base-load generation to supply industry, to get people to reinvest in industry, and in that, nuclear does make sense," said Toby Dalton, the deputy director of the Nuclear Policy Program at the Carnegie Endowment for International Peace. He formerly led a Department of Energy office at the United States Embassy in Pakistan dealing with nonproliferation issues. But he and other experts said that Pakistan would have to drastically improve its shaky and inefficient power distribution grid to make the best of this potential. "Before they can deal with this kind of power, they're going to have to address their grid issues," Mr. Dalton said. Their grid is incredibly unstable now. What Is in It for China? China has long been a close strategic partner of Pakistan, providing military equipment, diplomatic support and loans. China has already built two reactors at the Chashma nuclear site in Punjab Province, where it is also building two more. For China, the reactors planned for Karachi would help cement that alliance and also have a commercial rationale, as a showcase for the ACP-1000 reactor and other Chinese nuclear technology, said Andrew Small, a researcher with the German Marshall Fund of the United States, based in Washington, who is writing a book about Chinese-Pakistani relations. No ACP-1000 reactors have been built, even inside China. "It would be an important overseas project to see whether they would be able to sell it to other countries," Mr. Small said. He cited Chinese sources involved in dealing with Pakistan as saying: "It's important. It's going ahead, it needs to work, because it will be the proving case so that we can have other sales in the Gulf and elsewhere. Who Is Paying? Pakistani and Chinese officials have said little about how the new reactors, estimated to cost about $9.59 billion in total, will be paid for. And unless China proves willing to provide very generous loans and financial backing, that price tag could still be a problem. Mark Hibbs, an expert on nuclear policy at the Carnegie Endowment for International Peace who has closely followed the negotiations over the reactors, said money appeared to remain a sticking point. "It has come down to the money apparently," he wrote in emailed comments. "Pakistan wants to lower the cost of the project," and it also "wants cost of services over the lifetime of the project to be lowered," he wrote. If China provides loans for the reactors, its companies are likely to seek generous returns for providing nuclear fuel and services for the reactor, and Pakistani officials might hesitate at that price, said Mr. Dalton. "They're in a situation now where I could understand that the Chinese would have a lot of leverage on the price, because there's no one else that's willing to sell, or interested in selling, to Pakistan," he said. That gives the Chinese more leverage in the services side of things as well. What Are the Concerns? Large parts of Pakistan are beset by political instability and fighting with militants, but the country also has a nuclear arsenal and has refused to join the Nuclear Nonproliferation Treaty, as has its rival India, which also has a nuclear arsenal. Those safety and proliferation concerns have already fed misgivings about China's nuclear cooperation with Pakistan. The two countries have said that their cooperation is entirely peaceful and comes under international safeguards through the International Atomic Energy Agency. Both countries have also pointed to the United States" civilian nuclear energy agreements with India as a precedent justifying their own cooperation. China is a member of the Nuclear Suppliers Group, whose member countries have agreed to subject their exports of nuclear technology and materials to rules meant to prevent the proliferation of nuclear weapons. But China is likely to argue - despite intense skepticism from experts - that its nuclear projects in Karachi fall under an agreement that predates 2004, when it joined the group, meaning it does not have to seek approval from it. Whatever their misgivings, the United States government and other members of the Nuclear Suppliers Group appear unlikely to try to put serious obstacles in the way of the Karachi nuclear deal, experts said. The group works by consensus decision-making and does not have teeth of a treaty to enforce its rules, the experts said. "There isn't a very clear mechanism to do a huge amount about it," Mr. Small said. "The problem in this case is that if they accept it, it really is just then implicitly granting an exception for Pakistan," he added. If they allow it to go ahead, then they have created de facto a China-specific exception for Pakistan.