Islamabad: The Economic Coordination Committee (ECC) of the Cabinet on Sunday approved the opening of an escrow account for depositing $900 million for making the project operational. Earlier the Supreme Court of Pakistan had endorsed the multi-billion dollars Reko Diq project deal.
Federal Minister for Finance and Revenue Senator Ishaq Dar presided over the committee of the Cabinet meeting virtually.
The Government of Pakistan and the Government of Balochistan with the approval of the federal and provincial cabinets, have entered into an out-of-court settlement with M/s Tethyan Copper Company Pvt Limited, Australia (TCCA). The company is jointly owned by Barrick Gold Corporation of Canada and M/s Antofagasta PLC of Chile.
The Ministry of Energy (Petroleum Division) submitted a summary of accrued interest with respect to the amount held in an escrow account in connection with the Reko Diq project dispute settlement. As per settlement terms, the Pakistan government has to clear liabilities to Antofagasta PLC.
In light of the terms of the agreed settlement, the committee allowed Finance Division to direct GHPL (for its own as well as GoB’s share), GDCL and PPL to deposit the aggregate amount of interest to the sum of $22,718,173, in the escrow account from March 31, 2022, to December 15, 2022.
The ECC further allowed Finance Division to arrange the interest payable for GoB’s share amounting to $8,519,314 from the loan of Rs65 billion already raised by the GHPL with the GoP guarantee.
Further, the ECC allowed the divisions of the Pakistan government concerned and the SOEs to act in such a manner to ensure that the deposited amount, along with interest deposited by the SOEs in the escrow account to form part of the consideration for share purchase of Reko Diq Mining Company Limited.
The ECC also considered and approved a proposal of the Finance Division through a summary of the funding plan of the Government of Pakistan for the share of the Government of Balochistan in the Reko Diq project.
As per the proposal, an overall funding commitment of $717 million over the period of six years by the GoP in respect of GoB SPV Project Capital Commitment is to be provided by the Government of Pakistan.
