File photo of Finance Minister Ishaq Dar. Photo courtesy PID
Finance Minister Ishaq Dar on Friday said Pakistan has secured around $13 billion in additional financial support—around $9 billion from China and over $4 billion from Saudi Arabia—in addition to assurances for $20 billion in investments.
Addressing a press conference after Prime Minister Shehbaz Sharif’s visit to Beijing earlier this week, he said China had agreed to roll over $4 billion in sovereign loans; refinance $3.3 billion commercial bank loans; and increase currency swap by about $1.45 billion, with total support of $8.75 billion. “Don’t worry, we will not let you down,” Dar quoted Chinese President Xi Jinping as telling the prime minister.
According to the finance minister, the loans would be rolled over whenever they reach maturity, adding that about $200 million in commercial loans had already been received by Pakistan. To a question, he said that China had agreed to fast-track the $9.8 billion high-speed rail project (Main Line-1) from Karachi to Peshawar, adding the Karachi Circular Railway and Hyderabad-Karachi motorway projects were also discussed. He said he had proposed converting some outstanding dues of Chinese power producers into overall debt stock and had already cleared about Rs. 160 billion in recent months.
On Saudi support, Dar said the Gulf kingdom had increased its financing by another $3 billion and doubled its deferred oil facility. The combined support from Saudi Arabia, he said, stood at $4.2 billion, adding that it should be implemented as soon as processing was done within a month.
The finance minister said Saudi Arabia had also agreed to revive the $10 billion petrochemical refining project at Gwadar. He said Pakistan was also engaging with Saudi Arabia for privatization transactions concerning LNG power projects and shares in other entities to ensure non-debt creating foreign inflows.
Apart from China and Saudi Arabia, said Dar, $1.4 billion inflows–$500 million from the Asian Infrastructure Investment Bank and two World Bank loans equaling $900 million under the national harmonization of general sales tax—were also maturing.
Referring to his previous claims of Pakistan’s currency being undervalued against the U.S. dollar, the minister maintained that the rupee’s real effective exchange rate was around Rs. 194 to the dollar. He called on all stakeholders to support the national interest and avoid undue profits.