Islamabad [Pakistan], November 14 (ANI): Pakistan is relying on assurances from Saudi Arabia and China to address a USD 5 billion external financing gap, with hopes of securing a debt rescheduling agreement with China and deferred oil payments from Saudi Arabia, despite initial delays, the Express Tribune reported on Thursday.
These efforts are part of Pakistan’s broader strategy to meet external funding requirements and fulfil conditions under a USD 7 billion bailout package with the International Monetary Fund (IMF).
The Pakistani government has reassured the IMF that it remains optimistic about receiving support from China’s Exim Bank, which has committed to rolling over USD 3.4 billion in project debt, and from Saudi Arabia, which has agreed to provide a USD 1.2 billion oil facility, as reported by the Express Tribune. These assurances were given by the executive directors of China and Saudi Arabia when the IMF board approved the bailout package.
Pakistan has also requested the IMF delegation to reconsider its requirement for significant changes to the Pakistan Sovereign Wealth Fund (PSWF) law by the end of December. While the IMF has yet to respond, the government has hired Alvarez & Marsal Sovereign Advisory Services, led by former central bank governor Dr. Reza Baqir, to advocate for its position.
In a briefing to the IMF on Wednesday, Pakistan reiterated its commitment to securing the necessary external financing, which will fill the USD 5 billion gap between 2024 and 2027, the Express Tribune reported, citing sources. Out of this, USD 2.5 billion is needed for the current fiscal year.
Pakistan had initially planned to raise USD 3.2 billion, including the USD 1.2 billion Saudi oil facility. However, each month of delay in finalising this facility reduces available funds by USD 100 million in the fiscal year.
On the Chinese front, Pakistan is seeking the rescheduling of approximately USD 3.4 billion in debt, with USD 750 million due within the next year. A significant portion of the Chinese debt, around USD 2.7 billion, is scheduled to mature between October 2025 and September 2027, as reported by the Express Tribune.
Pakistan Finance Minister Muhammad Aurangzeb, currently attending COP 29 meetings, will join the IMF discussions on Friday. During the IMF meeting, Pakistani authorities and Alvarez & Marsal briefed the IMF on the need for adjustments to the PSWF Act. The government has committed to amending the law by December to align it with IMF requirements, but it has also proposed that the IMF should not push for drastic changes. Specifically, Pakistan suggests that the sovereign wealth fund should not be treated as a state-owned enterprise, as originally envisioned by the IMF.
In response to IMF concerns, Pakistan has agreed to make several changes to the PSWF Act, including the omission of Section 50, which would have allowed for the sale of state-owned entities to foreign buyers. The law now requires amendments in several areas related to governance, revenue management, public asset management, and the handling of state-owned enterprises (SOEs), the Express Tribune reported. The government has agreed to bring the fund in line with international standards, including prohibiting the direct sale of assets to foreign countries.
Pakistan is also committed to removing special privileges for the sovereign wealth fund that would have allowed it to acquire state-owned enterprises or participate in their privatisation. If the IMF’s proposed amendments are passed by parliament, all such privileges will be rescinded. (ANI)
Disclaimer: This story is auto-generated from a syndicated feed of ANI; only the image & headline may have been reworked by News Services Division of World News Network Inc Ltd and Palghar News and Pune News and World News
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