Connect with us

Business

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

Published

1 year ago

on

  • 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.

Related Topics:
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

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

Published

2 days ago

on

By

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.

Continue Reading

Business

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

Published

2 days ago

on

By

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.

Continue Reading

Business

Discos report losses of Rs239 billion.

Published

2 days ago

on

By

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.

Continue Reading

Trending