Pakistan gets $12bn rollover assurances from friendly nations: FinMin Aurangzeb

• Rollover to be granted in deposits across 3 to 5 years, finmin says.
• Countries to renew rollover every year to support Pakistan, he adds.
• IMF informed about development, says Muhammad Aurangzeb.
  

After Islamabad received an extension on loan tenure from friendly nations, Finance Minister Muhammad Aurangzeb said the International Monetary Fund (IMF) will give its final nod to the $7 billion loan programme for Pakistan.

In this regard, Pakistan requested its three largest bilateral partners — Kingdom of Saudi Arabia, China, and United Arab Emirates — to grant rollover in deposits of $12 billion for three to five years.

The three nations have, therefore, confirmed the rollover for three years with renewal to take place every year — in their bid to back Islamabad in securing an approval from the Washington-based lender.

The IMF has also been informed about the crucial development.

The international lending institution’s loan programme will span over a period of 37 months under the Extended Fund Facility (EFF), said the minister, adding that its executive board’s meeting is expected at the end of August or early September.

“There are assurances IMF’s Executive Board might consider approval of $7 billion EFF package by end of August 2024 or maximum few days later in early September,” said Aurangzeb, speaking with journalists following a meeting of the Senate Standing Committee on Finance.

Last month, Pakistan and the IMF reached an agreement for a $7 billion, 37-month loan agreement with tough measures such as raising tax on farm income. 

The staff-level agreement capped negotiations that started in May after Islamabad completed a short-term, $3 billion programme that helped stabilise the economy, avert a sovereign debt default and set challenging revenue targets in its budget to get IMF approval.

However, the IMF board’s approval, as per the finance minister, was linked with with $12 billion debt profiling by friendly countries including $5 billion from Saudi Arabia, $4 billion from China and $3 billion from the UAE for a three to five-year period.

“Pakistan has also requested debt relief from China for power plants,” Aurangzeb said.

Speaking with The News about the development, the minister said that the IMF has also assessed an external financing gap of $3 billion to $5 billion.

On the other hand, during a Senate panel meeting, the minister said government has appointed a consultant to launch Panda bond, and the transaction would be materialised within the ongoing year.

He said the government was considering the appointment of a Chinese consultant to secure IPPs debt owed by Chinese companies and banks. They were expecting positive developments for establishing a joint working group in the next few days.

“Pakistan wants extension repayment tenure of Chinese IPPs for three to five years to the tune of $9 billion,” the minister said.

Aurangzeb added that international commercial banks were interested in Pakistan but wanted to get favourable pricing. They are waiting for approval from the IMF on bailout package and improvement from the credit rating agencies, he said.