S Arabia to finalise $1.2bn oil facility in December

ISLAMABAD: In the aftermath of giving confirmation to the IMF for the provision of an oil facility, the Kingdom of Saudi Arabia’s high-level delegation is expected to visit Pakistan by December 2024 to finalise modalities to provide $1.2 billion Saudi Oil Facility (SOF).

The Kingdom of Saudi Arabia (KSA) has granted its confirmation for a fresh SOF, paving the way for securing approval from the IMF for $7 billion Extended Fund Facility (EFF). Pakistan has also made a request to the IMF for augmentation of loans with a $1 billion climate finance facility.

“The KSA delegation is expected to hold parleys with Pakistani authorities in coming December 2024 for finalising modalities of fresh Saudi Oil Facility (SOF),” top official sources confirmed while talking to The News here on Monday.

Pakistan may request KSA for SOF for a year period on deferred payment as a cash amount of $100 million will be proposed on a monthly basis for the next 12 months and its repayment will kick-start from the next calendar year. This facility might remain operational for three-year period but it’s pre-mature to ascertain its exact timeframe.

During the calendar year 2023, the Saudi Fund for Development (SFD) has provided 901.25 million Saudi riyal for construction of Mohmand Dam. This Mohmand Dam Hydropower project aims to enhance national energy security and support development in the Islamic Republic of Pakistan, through the construction of this hydropower generation project. This will increase the efficiency of power production providing sustainable water sources for human and agricultural use, by producing 800 megawatts of energy and storing approximately 1.6 million m3 of water. The project will also mitigate the risks of floods and associated disasters and combat the effects of climate change in the region.

The SFD had committed 1.6 billion Saudi riyal (SR) for Pakistan during the calendar year 2023 out of which the disbursement stood at 1.3 billion SR in shape of development project grants. For Tarbela Dam repair, the KSA provided 178.28 million SR.

For Irrigation and Drainage for Lands Located on Indus River Banks (Phase I), the KSA provided 231.5 million SR. In totality, the KSA provided grants of 3491.65 million Saudi riyal for different projects undertaken in Pakistan as for Makran Coastal Highway the amount stands at 51.95 million SR, Golen Gol Hydropower Plant construction 150 million SR, Neelum-Jhelum Hydropower Plant construction 300 million SR, infrastructure reconstruction of Malakand region 270 million SR, Neelum-Jhelum Hydropower Plant construction (Additional Loan) 375 million SR, Golen Gol Hydropower Plant construction (Additional Loan) 216.75 million SR, Challa Bandi-Battika Road 206.25 million SR and Mohmand Dam Hydropower 901.25 million SR.