Saudi Oil Facility
ISLAMABAD: In an effort to address the $2 to $2.5 billion financing gap identified by the International Monetary Fund (IMF) for the current financial year, Pakistan has formally requested a $1.2 billion oil facility from Saudi Arabia.
This facility, known as the Saudi Oil Facility (SOF), is sought for a duration of 12 months, according to official sources.
The request comes as part of Pakistan’s broader strategy to secure financial support amid ongoing economic challenges.
A recent staff-level agreement with the IMF, part of the $7 billion Extended Fund Facility (EFF), has been reached; however, it still requires approval from the IMF’s Executive Board before the loan can be finalized.
In addition to the oil facility, Pakistan is exploring various avenues to bridge its financing needs.
The Saudi Arabian government has expressed interest in acquiring a 15% stake in the Reko Diq project, with the investment planned to occur in two phases. However, this transaction has yet to be completed.
Pakistan is also seeking financial assistance from other sources. The Islamic Development Bank’s International Trade and Finance Corporation (ITFC) has been approached for a loan ranging between $400 and $500 million.
Furthermore, Gulf commercial banks and Standard Chartered Bank (SCB) have been requested to provide an additional $1 billion loan.
To address the total financing requirement of $26.2 billion for the fiscal year, Pakistan is also asking three bilateral creditors to roll over $12 billion in deposits currently held by the State Bank of Pakistan. Additionally, the country requires commercial refinancing amounting to $4 billion.
In a recent statement, Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb reiterated Pakistan’s commitment to its homegrown economic agenda, which focuses on implementing comprehensive institutional reforms across key economic sectors.
During a meeting with Saudi Ambassador Nawaf Bin Said Al-Malki at the Finance Division, Senator Aurangzeb praised Saudi Arabia’s consistent economic support and highlighted the renewed interest of Saudi investors in pursuing joint ventures and business collaborations with Pakistan’s private sector.
Ambassador Malki expressed commendation for the Pakistani government’s efforts in implementing structural and institutional reforms and reaffirmed the Kingdom’s steadfast commitment to supporting Pakistan’s economic growth.
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