Total loans, grants hit $185.6 million in July

ISLAMABAD: Pakistan received a total of $185.6 million in July 2022 in the shape of loans and grants from all avenues including $100 million from Saudi Arabia under the oil facility on deferred payment in the first month (July 2022) of fiscal year 2022-23, official data showed on Monday.

The aforementioned amount was received against total budgetary estimates of $22.8 billion through multilateral, and bilateral creditors, the launching of international bonds, commercial loans, IMF’s assistance and dollar inflows through Naya Pakistan Certificates.

According to official announcement of Economic Affairs Division (EAD), among all bilateral donors there were only four countries, in the first month of the current fiscal year, that provided $107.5 million including Saudi Arabia’s $100 million for oil facility, France’s $1.55 million, Japan’s $0.01 million, and US that gave $6.01 million.

Among the multilateral creditors, four including ADB (Asian Development Bank) and World Bank, provided financial assistance in the shape of IDA and IBRD, while IsDB (Islamic Development Bank) made a disbursement of $78.04 million.

The Asian Development Bank disbursed $7.36 million in the first month of the current fiscal year. The World Bank provided $59.14 million as IDA facility and it also released $6.56 million as IBRD loans to Pakistan.

The IsDB has disbursed $4.99 million during the first month of the current fiscal year. The country did not receive any amount in the heads of international bonds, commercial loans, IMF and Naya Pakistan Certificate in the first month of the current fiscal year.

Pakistan bought $100 million petroleum products on deferred payment under the Saudi oil facility for the fifth month in a row in July 2022. The government has budgeted around $800 million for petroleum imports under the Saudi oil facility.

Reportedly, Saudis are planning to multiply the facility by two, raising it from $1.2 to $2.4 billion. Such oil imports are likely to grow down the road. Saudi Arabia exported $500 million petroleum products to Pakistan from March to July, while it also supplied oil cargoes worth $100 million/month in March, April, May, and June 2022.

The $1.2 billion financing agreement for the import of petroleum products was inked on November 29, 2021 between the Saudi Fund for Development (SFD) and Pakistan’s Economic Affairs Division (EAD). Under this facility, the Pak-Arab Refinery Limited (PARCO) and the National Refinery Limited (NRL) were to import petroleum products up to $100 million/month from Saudi Arabia.

The terms of the financing include the price of purchase by the SFD and a margin of 3.80 percent/annum. The financing agreement was initially valid for one year, which, according to the officials, could be extended for another year after reaching a bilateral agreement.