Pakistan requests Saudi Arabia to provide $1.2bn oil facility

ISLAMABAD: Pakistan has requested for $1.2 billion Saudi Oil Facility (SOF) to bridge the $2-2.5 billion financing gap identified by the IMF for the current fiscal year. However, a finance ministry press statement did not say anything in this regard.

The Saudi government wants to invest in the Reko Diq project to procure 15 percent stakes in two phases but the transaction is yet to be accomplished. Pakistan had struck a staff level agreement with the IMF under the $7 billion Extended Fund Facility (EFF) but it is yet to be placed before the Fund’s Executive Board for approval of the loan.

Official sources said Pakistan had requested the Saudi government for $1.2 billion SOF for next 12 months. A request has also been made for the Islamic Development Bank’s ITFC facility of $400 to $500 million. The Gulf commercial banks as well as the Standard Chartered Bank (SCB) have also been requested for $1 billion loan.

Besides fulfilling the additional financing of $2.5 billion, Pakistan is also asking three bilateral creditors to roll over $12 billion deposits lying with the State Bank of Pakistan.

The country also requires commercial re-financing of $4 billion during the current fiscal year to meet the total requirements of $26.2 billion for the ongoing fiscal year.

According to an official statement issued by the finance ministry, Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb reaffirmed Pakistan’s commitment to a homegrown economic agenda centered on comprehensive institutional reforms across key sectors of the economy. The minister made these remarks during a meeting with Saudi Ambassador Nawaf Bin Said Al-Malki, who called on him at the Finance Division on Wednesday.

Senator Aurangzeb deeply appreciated consistent Saudi economic support to Pakistan, while highlighting the Saudi investors’ renewed interest in pursuing joint ventures and business collaborations with Pakistan’s private sector. Malki commended the Pakistani government’s efforts for implementing the structural and institutional reforms and reiterated the Kingdom’s unwavering commitment to contributing to Pakistan’s economic growth.