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Chinese bank to give $300 million to Pakistan today: Ishaq Dar

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  • China’s ICBC had approved a loan facility of $1.3bn for Pakistan.
  • Part of the amount has been returned in previous disbursements.
  • Development will boost Pakistan’s low foreign exchange reserves.

The Industrial and Commercial Bank of China (ICBC) is set to give Pakistan $300 million today in a move that will boost the country’s foreign exchange reserves, Finance and Revenue Minister Ishaq Dar said on Friday.

He wrote on Twitter that ICBC had approved a loan facility of $1.3 billion for Pakistan, which had earlier been repaid. The Chinese bank has already returned part of the amount in two previous disbursements.

“State Bank of Pakistan would receive back third and last disbursement today in its account amounting to $300 million,” the finance czar wrote on his official Twitter handle. “It will shore up forex reserves of Pakistan.”

The third critical disbursement from the ICBC will be released after Pakistan completes the necessary documentation.

Last month, the Chinese lender approved a rollover of a $1.3 billion loan for Pakistan. Following the announcement, the Chinese bank deposited $500 million — the first disbursement — on March 4 and then the second tranche of an equivalent amount was released on March 17.

The cash-strapped nation of 220 million people is going through one of its biggest economic crises ever as multiple delays in its loan program created a dollar shortage, and import restrictions and reduced foreign-exchange reserves to less than one month of imports.

The nation’s foreign exchange reserves stand at $4 billion while it needs to pay $2.2 billion in the quarter ending June. It expects to roll over a debt of $2.3 billion, according to State Bank of Pakistan Governor Jameel Ahmad.

More external financing will be coming to Pakistan only after Islamabad signs a deal with the International Monetary Fund (IMF), which the minister said should be done by next week.

The lender has been negotiating the deal with Pakistan since end-January to clear its ninth review, which if approved by its board will issue over $1 billion tranche of the $6.5 billion bailout agreed upon in 2019.

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Irfan Siddiqui meets with the PM and informs him about the Senate performance of the parliamentary party.

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The head of the Senate’s Foreign Affairs Standing Committee and the PML-N’s parliamentary leader paid Prime Minister Muhammad Shehbaz Sharif a visit in Islamabad.

Senator Irfan Siddiqui gave the Prime Minister an update on the Parliamentary Party’s Senate performance.

Additionally, Senator Irfan Siddiqui gave the Prime Minister an update on the Senate Standing Committee on Foreign Affairs’ performance.

He complimented the Prime Minister on his outstanding efforts to bring Pakistan’s economy back on track and meet its economic objectives.

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Business

SIFC Increases Direct Foreign Investment: Investment in the Energy Sector Rises by 120%

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The Special Investment Facilitation Council is intended to help Pakistan’s energy sector attract $585.6 million in direct foreign investment in 2024–2025. The amount invested at the same time previous year was $266.3 million.

This is a notable 120% rise, mostly due to investments in gas exploration, oil, and power. Such expansion indicates heightened investor confidence and emphasizes the development potential in important areas.

The State Bank reports that foreign investment in other vital industries has increased by 48% to $771 million.

This advancement is a blatant testament to SIFC’s efficient investment procedure and quick project execution.

The purpose of the Special Investment Facilitation Council is to establish Pakistan as an investment hub by aggressively promoting regional trade and investment in the energy sector and other critical industries.

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Business

Discos report losses of Rs239 billion.

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When compared to the same period last year, the data indicates that discos have decreased their losses in the first quarter of the current fiscal year.

The distribution businesses recorded losses of Rs239 billion in the first three months of the current fiscal year, a substantial decrease from the Rs308 billion losses sustained during the same period the previous year.

Additionally, the distribution businesses’ rate of recovery has improved. It has increased to 91% in the first quarter of this year from 84% in the same period last year, indicating success in revenue collection.

Regarding circular debt, the Power division observed a notable change. Last year, between July and October, the circular debt grew by Rs301 billion. Nonetheless, this year’s first four months saw a relatively modest increase in circular debt, totaling about Rs11 billion.

These enhancements show promising developments in the electricity sector’s financial health in Pakistan, where initiatives are being made to accelerate recovery rates and slow the expansion of circular debt.

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