China and Saudi Arabia Expected to Extend $9 Billion Loans to Pakistan This Year
China and Saudi Arabia are set to extend $9 billion in loans to Pakistan this fiscal year, 2024-25, according to officials from the Economic Affairs Division (EAD) who briefed the National Assembly Standing Committee on Economic Affairs.
The EAD is working with the Arab Coordination Group and the Qatar Fund for Development to secure funding for the Diamer Bhasha Dam this year. Officials confirmed the $9 billion loan rollover and noted that Pakistan has a total repayment of over $20.8 billion this fiscal year.
The EAD anticipates receiving $500 million from the Islamic Development Bank for oil and commodity loans, but Saudi Arabia is currently not inclined to offer additional oil loan facilities.
The committee learned that the Geneva Donor Conference in January 2023 pledged $10.7 billion for projects, but Pakistan has only received $3 billion, mostly as debt rather than grants.
Pakistan is expected to get $1 billion from the World Bank for the Dasu Hydropower Project, with its first phase due for completion by 2027. The Asian Infrastructure Investment Bank will handle the N5 project construction.
Officials also mentioned the need for a better monitoring system for NGO projects but assured that funding is closely monitored to avoid misuse for terrorism. The committee asked for more information on delayed external financing projects at the next meeting.
