Pakistan seeks $1 billion oil facility from Saudia. Pakistan’s government has asked Saudi Arabia to provide a $1 billion oil facility on deferred payment for the calendar year 2024 as it prepares to start review talks with the International Monetary Fund (IMF).
“Pakistan has made a formal request for $1 billion Saudi Oil Facility (SOF) on deferred payment with effect from January 2024. The KSA has not yet given its confirmation, and its exact modalities will be worked out within the next couple of months, including attached cost and other terms and conditions,” sources told the publication.
As part of the $3 billion Standby Arrangement (SBA), the facility is a component of the financing strategy that Pakistani authorities have decided upon and developed with the IMF.
In December of this year, the current facility will no longer be used.
In the final three months (July-September) of the current fiscal year, Islamabad has already received $300 million.
From March to September 2023, KSA spent a total of $700 million under the current SOF; it was hoped that another $300 million would be spent by the end of December 2023.
Despite stating that it was a positive development while speaking on the condition of anonymity, another official shared bad news regarding the Islamic Development Bank’s (IsDB) pledge of $3.3 billion under the ITFC mechanism. The bank was required to contribute $1 billion during the current fiscal year as part of the pledge.
Pakistan seeks $1 billion oil facility from Saudia before IMF talks.
However, the bank has now said that it might reduce its $1 billion in syndicated loan facilities to between $250 and $500 million for the current fiscal year. The IsDB is anticipated to provide its final approval at its upcoming board meeting in December 2023.
The IsDB team blamed the decision on a number of factors during their conversation with Pakistani authorities, including the difficulty in obtaining dollar loans from international financial institutions due to high-interest rates around the world.
