$100m Saudi oil facility resumes this month

ISLAMABAD: While kick-starting the $100 million Saudi Oil Facility (SOF) from the ongoing month, Pakistan has so far materialised $6 billion from international creditors in the first eight months (July-Feb) of the current fiscal year.

Prime Minister Shehbaz Sharif Wednesday embarked upon a visit to Saudi Arabia and now the SOF is expected to begin with $100 million every month from March 2025. The $1.2 billion oil facility will be made available to Pakistan for 12 months till February 2026. Out of the total $6 billion in foreign inflows in the shape of loans, the government has fetched $1 billion from the IMF under the EFF arrangement, which is not shown in the data released by the Economic Affairs Division (EAD).

Against a total budgetary estimate of $19.4 billion in foreign loans for the whole fiscal year 2024-25, the $9bn foreign deposits included $5 billion from KSA and $4 billion from China respectively. If all inflows including the rollover of deposits lying with the State Bank of Pakistan (SBP) from China and Saudi Arabia materialises, then Islamabad will have to fetch foreign loans worth $4.4 billion in the remaining period of four months (March to June) 2025 for materializing the total foreign loans of $19.4 billion till end of June 2025.

According to the official data released by the EAD, Pakistan has so far fetched $2.49 billion from multilateral creditors in the first eight months against total budgetary foreign inflows of $4.57 billion for the whole financial year. This indicates that the government will have to accelerate the disbursement from multilateral creditors in the remaining period of the current fiscal year.

China remained the largest creditor for guaranteed loans and provided a loan facility of $306 million. The Asian Development Bank (ADB) has disbursed $1.09 billion in the first eight months, while AIIB provided a $60.25 million loan facility. The EIB disbursed $10.53 million so far. The World Bank’s loan under IBRD stood at $217.8 million while the bank’s soft lending as IDA stood at $642.5 million in the first eight months.

The European Union (EU) did not disburse any amount against budgetary estimates of $4.76 million. The IFAD has disbursed $36.93 million. The Islamic Development Bank has provided $148.26 million, while IsDB provided a short-term loan of $265.72 million as commodity financing. The OPEC fund Standard Chartered Bank London also provided $3.34 million and $3.98 million respectively. From bilateral creditors, Pakistan has so far fetched $334.96 million in the first 8 months against the total budgetary estimates of $471.72 million for the whole financial year.

France has remained the largest bilateral debt partner, as it provided $103.23 million in the first 8 months against total budgetary estimates of $103.21 million for the whole financial year. China has provided $99.17 million, Germany $26.81 million, Japan $17.18 million, Korea $11.76 million, Kuwait $24.4 million, Saudi Arabia $12.37 million and the USA $40.05 million so far. The government could not launch any international bonds so far as it had targeted to fetch $1 billion. Out of total envisaged foreign commercial loan of $3.779 billion, Islamabad could so far get a $500 million loan. The government has attracted $1.3 billion through Naya Pakistan Certificates.