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Pakistan requests Saudi-based IsDB for additional oil financing, waiver of service charges

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10 months ago

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  • Pakistan asking IsDB to jack up oil facility from $50m to $100m.
  • IsDB has proposed services charges of less than 1%.
  • It is yet to be seen how Pakistan’s request would be entertained.

ISLAMABAD: The Islamic Development Bank (IsDB) has proposed enhanced service charges on Pakistan’s request for an additional oil financing facility but Islamabad has requested the lender to give a waiver, reported The News on Thursday.

Officials of the Prime Minister’s Secretariat told The News that after striking the staff-level agreement with the International Monetary Fund (IMF), Pakistan is negotiating with the Jeddah-based lender to jack up the oil facility from $50 million to $100 million for the end of December 2023. They are also discussing the possibility of reducing the level of service charges imposed on this facility.

“IsDB has proposed services charges of less than 1% on the committed oil facility but we made a request to grant us a waiver or reduce it,” an official told the publication.

The term sheet shows that the service charges are around 0.05% to 0.5%. The IsDB had already provided $100 million in September 2023 for oil financing and has indicated that it may provide a $50 million facility till the end of December.

It is yet to be seen how Pakistan’s request will be entertained by the IsDB management and its board when it meets on December 11.

The IsDB’s Executive Board is also set to meet next month to approve syndicate financing of $300 million.

With the signing of SLA with the IMF, all other multilateral creditors including the World Bank, Asian Infrastructure Investment Bank (AIIB) and Asian Development Bank (ADB) have responded positively and shown an inclination to resume programme loans.

As per The News, the three multilateral institutions are ready to give approval for programme loans in December 2023.

The ADB board is expected to hold a meeting on December 4 in Manila to consider the Domestic Resource Mobilization (DRM) programme loan of $350 million for Pakistan.

The WB is expected to grant approval to RISE-II on December 20 while the AIIB is going to consider approval of $250 million on December 21 just a few days before the start of the Christmas and new year holidays.

The IMF’s Executive Board date has not yet been confirmed or communicated when it would meet to grant approval for Pakistan’s next tranche. It might be held either on December 7 or December 13 or 14.

However, it is likely that the IMF’s Executive Board may grant approval for $700 million tranche before the Christmas holidays.

If everything gets materialised, then Islamabad is expecting a disbursement of $1.7 to $1.8 billion during December.

Out of the total gross financing requirement of $25 billion, Pakistan has so far materialised $5 billion from all multilateral and bilateral creditors in the shape of disbursements of loans and time deposits. 

The EXIM Bank of China also granted a rollover of $1.2 billion so far for the current fiscal year.

Pakistan has also made a fresh request to credit rating agencies to review their ratings after approval of the next tranche from the IMF next month.

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Islamic Sukuk Bonds: Government Is Expected To Begin Bond Auction Next Week

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There is now more positive economic news for the people of Pakistan. The government is anticipated to begin the Sukuk Islamic Bond auction next week, after the central bank’s announcement of a large drop in the policy rate.

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SIFC Encourages Green Tourism: Reforming Visas to Increase Investment

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Enhancing investment in the tourism sector, Green Tourism Pakistan’s initiative has received backing from the Special Investment Facilitation Council.

Visa-On-Arrival for 126 countries, Visa-Free Entry for Gulf Cooperation Council nations, and 24-hour expedited visa processing are some of the main features of the Green Tourism Visa Policy.

It is anticipated that these endeavors will draw in about 80 million dollars in foreign direct investment and 8.3 billion rupees in domestic investment.

Green Tourism Private Limited has introduced hunting resorts in Naltar, Hunza, and Skardu, along with four- and five-star city hotels, to improve the tourism experience.

In the first phase of the project, 17 of the 78 areas have seen the start of development activity.

Approved is a central authority for Green Tourism that will supervise the growth of Air Operations.

To promote Religious Tourism, extra precautions have been taken to guarantee the security of visitors from all religions, including Sikhs and Buddhists.

Furthermore, in order to improve the quality of the tourist experience, the green guide quality program has been introduced to supply top-notch tour guides.

There is now a deluxe bus excursion from Islamabad to Peshawar that promotes local culture.

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July 2024 export data from Pakistan shows a significant rise.

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The Strategic Investment Facilitation Council (SIFC) has been instrumental in improving Pakistani products’ access to international markets, as seen by the significant surge in exports from the country at the start of the 2024–25 fiscal year.

With a 7.26% rise over the same month the previous year, July 2024 exports to the US were $476.017 million. After increasing by 7.74% annually, the United Arab Emirates emerged as the second-largest export destination.

The third and fourth places were occupied by exports to the UK ($183.303 million) and China ($60.100 million). A substantial increase in exports to Afghanistan was recorded in July of this year, rising from $46.262 million to $88.065 million, largely due to successful anti-smuggling efforts.

With a combined export volume of $553.951 million, more important export destinations included Germany, the Netherlands, Italy, Spain, Saudi Arabia, and Turkey.

A bright future for the national economy is suggested by the growing confidence major international markets have in Pakistani exports. Through the efforts of SIFC and the government, this greater access to global markets has been made possible.

Pakistan’s economy is predicted to remain stable as a result of the export growth that SIFC has enabled.

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