Pakistan Secures $3.2 Billion Foreign Loan Promises, Including Saudi Oil Facility

Islamabad – Pakistan has successfully secured commitments for $3.2 billion in foreign loans for a one-year period, which includes an oil facility from Saudi Arabia.

The breakdown of the commitments includes:

• $1.2 billion from Saudi Arabia for an oil facility.
• $1 billion in trade financing from Dubai Islamic Bank.
• $600 million from Standard Chartered Bank.
• Approximately $430 million from the Islamic Development Bank’s ITSC facility.

According to the Ministry of Finance, Pakistan aims to secure a total of $19.274 billion in the current fiscal year. This figure does not include loans obtained under the International Monetary Fund’s Extended Fund Facility (EFF).

The government plans to acquire:

• $4.56 billion from multilateral lenders, including the World Bank and the Asian Development Bank.
• $9.4 billion from bilateral lenders.
• $3.779 billion from commercial banks.
• $1 billion from international bonds.
• $500 million from new Pakistan certificates.

Recently, the Federal Secretary of Finance visited Saudi Arabia, though no formal agreements were reached during the trip. It is expected that discussions centered on finalizing the $1.2 billion Saudi oil facility and the Reko Diq deal.

While the Ministry of Finance did not respond to inquiries from reporters regarding the latest developments, the plan for the 2025 fiscal year indicates a strong commitment to finalize all multilateral loan agreements.

Key Multilateral Loan Programs

For the fiscal year 2025, notable multilateral loan programs include:

1. $400 million for a program addressing environmental and natural disasters (first subprogram).
2. $100 million for women’s financial inclusion (second subprogram).
3. $300 million for domestic resource mobilization (second subprogram).

Additionally, the government plans to renew deposits of $4 billion from China and $5 billion from Saudi Arabia. For foreign commercial loans, there is an intention to refinance approximately $3.878 billion in loans and secure a new commercial loan of $1.2 billion.

Sustainable Financing Initiatives

Amidst challenges posed by climate change and devastating floods, the government is focused on establishing a sustainable financial framework. This initiative aims to:

• Promote sustainable and green financing.
• Address and mitigate the negative impacts of climate change.
• Ensure adherence to Sustainable Development Goals (SDGs).
• Meet targets through allocated national funds.

The Ministry of Finance is collaborating with joint sustainability coordinators to explore the issuance of green, social, or sustainability bonds in the fourth quarter of fiscal year 2025. Islamabad aims to issue its first Panda bonds in the Chinese capital markets, with support from financial advisors including China Development Bank and Citibank.

This strategic approach not only aims to secure necessary funding but also addresses the critical issue of sustainable development in the face of ongoing environmental challenges.