Pakistan Foreign Loan Commitment: Short-Term Debt Strategy
$3.2 Billion Short-Term Borrowing Plan
Pakistan finalized a significant short-term debt plan. The country plans to borrow $3.2 billion externally. This borrowing is structured as one-year foreign debt. A key component is the Saudi Oil Facility (SOF). Pakistan secured $1.2 billion for the SOF. Other major funding came from commercial sources.
Specific Commercial and Development Loans
Pakistan secured a $1 billion commercial loan. This funding came from Dubai Islamic Bank. A $600 million loan was secured through SCB. The Islamic Development Bank’s ITSC provided $430 million. These commitments were successfully and conveniently obtained.
FY 2024-25 Total External Revenue
The Finance Ministry presented its borrowing strategy. The total planned external borrowing for FY 2024-25 is $19.274 billion. This external revenue figure is comprehensive. It does not include any potential IMF Extended Fund Facility (EFF) funds.
Diverse Sources of Funding
Funding comes from various global sources. Multilateral lenders contributed $4.56 billion. These include the World Bank and the ADB. Bilateral lenders pledged a large $9.4 billion. Commercial banks will provide $3.779 billion. Pakistan expects $1 billion from international bonds. Naya Pakistan Certificates are expected to raise $0.5 billion. The Pakistan Foreign Loan Commitment relies on diverse partners.
Key Multilateral Program Funding
The Asian Development Bank (ADB) made major commitments. It pledged several program loans for FY 2025. This includes $400 million for climate mitigation. Another $100 million supports financial inclusion for women. $300 million is allocated for domestic resource mobilization. The government seeks to complete all multilateral program initiatives.
Bilateral and Commercial Renewals
Pakistan intends to renew bilateral deposits. This includes $4 billion from China. It also includes $5 billion from Saudi Arabia. The government plans to renew $3.878 billion in commercial bank loans. An additional $1.2 billion in new commercial debt is planned.
Focus on Sustainable Finance
Pakistan faces severe climate change effects. Catastrophic floods and weather changes demand attention. The government will establish a sustainable financial framework. This framework promotes sustainable and green financing. It helps combat climate change adverse effects. It ensures adherence to Sustainable Development Goals (SDGs). The Ministry of Finance is actively coordinating efforts.
Exploring New Bond Markets
Issuing green or sustainability bonds is being explored. This may occur in the fourth quarter of FY 2025. Islamabad also plans the first issuance of Panda Bonds. This will access Chinese capital markets. The Pakistan Foreign Loan Commitment includes this innovation. Joint financial advisors are assisting with the Panda Bonds.