$100 Million Saudi Oil Facility Set to Resume This Month

Prime Minister Shehbaz Sharif is currently on a visit to Saudi Arabia, where the Saudi Oil Facility is expected to commence with monthly disbursements of $100 million starting in March 2025. This $1.2 billion oil facility will be available to Pakistan for a duration of 12 months, concluding in February 2026. Out of the total $6 billion in foreign inflows, the government has received $1 billion from the International Monetary Fund (IMF) under the Extended Fund Facility (EFF), although this amount is not reflected in the data released by the Economic Affairs Division (EAD). For the fiscal year 2024-25, Pakistan has a budgetary estimate of $19.4 billion in foreign loans. The foreign deposits include $5 billion from Saudi Arabia and $4 billion from China. To meet the total foreign loan target of $19.4 billion by the end of June 2025, Islamabad will need to secure an additional $4.4 billion in loans over the next four months (March to June 2025). According to official data from the EAD, Pakistan has obtained $2.49 billion from multilateral creditors in the first eight months, against a total budgetary foreign inflow target of $4.57 billion for the entire financial year. This indicates a pressing need for the government to accelerate disbursements from multilateral creditors in the remaining months. China has emerged as the largest creditor, providing guaranteed loans amounting to $306 million. The Asian Development Bank (ADB) has disbursed $1.09 billion, while the Asian Infrastructure Investment Bank (AIIB) contributed $60.25 million. The European Investment Bank (EIB) provided $10.53 million, and the World Bank’s loans under the International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA) totaled $217.8 million and $642.5 million, respectively. However, the European Union (EU) has not disbursed any funds against its budgetary estimates of $4.76 million. The International Fund for Agricultural Development (IFAD) has provided $36.93 million, and the Islamic Development Bank has contributed $148.26 million, along with a short-term loan of $265.72 million for commodity financing. The OPEC Fund and Standard Chartered Bank London have also provided $3.34 million and $3.98 million, respectively. From bilateral creditors, Pakistan has secured $334.96 million in the first eight months against total budgetary estimates of $471.72 million for the entire financial year. France has been the largest bilateral debt partner, providing $103.23 million, while China contributed $99.17 million. Other contributions include $26.81 million from Germany, $17.18 million from Japan, $11.76 million from Korea, $24.4 million from Kuwait, $12.37 million from Saudi Arabia, and $40.05 million from the USA. Despite these efforts, the government has not yet launched any international bonds, which were targeted to raise $1 billion. Out of the total envisaged foreign commercial loan of $3.779 billion, Islamabad has so far secured a $500 million loan. Additionally, the government has attracted $1.3 billion through Naya Pakistan Certificates.