Saudi oil facility dried up after first six months of last fiscal

Pakistan has attracted $1.14 billion in shape of Naya Pakistan Certificates

By Mehtab Haider
July 27, 2024
Shows a view of installations of an oil refineryon April 1, 2023 — AFP

ISLAMABAD: Without incorporating $3 billion received by Pakistan from the IMF under the Standby Arrangement program, Pakistan could fetch only $9.81 billion in the shape of foreign loans against official projections of $17.61 billion for the last fiscal year.

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In the last fiscal year 2023-24 ending June 30, Pakistan failed to convince Saudi Arabia for any fresh oil facility (SOF) after receiving $595.18 million in the first half (July-Dec) of the previous financial year.

Although, Islamabad made a formal request for the continuation of the oil facility for another 12 months, its efforts drew a blank.

Pakistan has resumed securing commercial foreign loans and got $1 billion in the last fiscal year but it was much lower than the official projection, as the government had budgeted to get $4.5 billion in the shape of foreign commercial loans. This $1 billion commercial foreign loan was obtained from a Chinese commercial bank.

Pakistan could not manage to launch any international bond in the last fiscal year against official projection of launching $1.5 billion bonds due to higher interest rates in international markets and deteriorated ratings from international rating agencies.

Meanwhile, Federal Secretary Economic Affairs Division (EAD) Kazim Niaz informed the National Assembly’s Standing Committee on EAD that Pakistan would have to repay approximately $20.6 billion during the current fiscal year out of which deposits from China and Saudi Arabia stood at $9 billion. The project loans, he said, committed by the multilateral donors stood at around $10.9 billion for the current fiscal year.

He said funding for the Diamer-Bhasha dam was expected to be firmed up in the ongoing fiscal year. On the question of disbursements of loans committed by donors in the Geneva’s conference for reconstruction of flood-affected areas, he said so far disbursement of loans stood at $3 billion.

According to the official data released by EAD on Friday, multilateral creditors disbursed $4.279 billion during the last fiscal year out of which the World Bank clinched the top position. The WB disbursed $1.922 billion in the shape of concessional IDA funding while IBRD loans disbursement stood at $296 million. The ADB has disbursed $1.328 billion during the last financial year. The AIIB disbursed $344 million in the last fiscal year.

From bilateral creditors, Pakistan has secured foreign loans of $919.43 million during the fiscal year 2023-24. China has disbursed $69.14 million, USA $40.18 million, $595.18 million were from Saudi Oil Facility (SOF) and $49.57 million from France.

Pakistan has attracted $1.14 billion in the shape of Naya Pakistan Certificates. An additional $2 billion time deposit was secured from the Kingdom of Saudi Arabia in the last fiscal year.

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