Pakistan gets USD 4.3 billion loan rollover assurances from China, Kuwait

Pakistan has received assurances from China and Kuwait for the rollover of USD 4.3 billion in loans, as the country seeks to meet its external financing requirements for the current fiscal year, official sources said.

China has assured Pakistan of rolling over USD 4 billion, while Kuwait is expected to extend a USD 300 million facility, sources in the Finance Ministry said.

When are the loans due for rollover?

China's USD 4 billion deposit is scheduled for rollover in March 2027, according to Finance Ministry sources. They expect the Chinese and Kuwaiti facilities to be extended for approximately one year, although final terms have not been disclosed. Saudi Arabia has separately extended its USD 3 billion deposit, but its duration remains unspecified.

Finance Minister Muhammad Aurangzeb said Wednesday that Saudi Arabia had rolled over USD 3 billion in loans following discussions between the two countries.

Speaking to reporters at Parliament House, Aurangzeb said the Saudi loan had been extended for an appropriate period. He added that Pakistan did not currently require additional financial support from Saudi Arabia.

Together, the Chinese, Kuwaiti and Saudi facilities account for USD 7.3 billion in bilateral loan rollovers identified by Finance Ministry officials. The Saudi extension has been confirmed, while the Chinese and Kuwaiti arrangements remain subject to final confirmation.

How will the rollovers affect Pakistan's external debt payments?

Pakistan faces approximately USD 21.5 billion in gross external debt-servicing obligations during FY27, according to figures presented to the Senate Standing Committee on Finance and Revenue. Around USD 10.5 billion is expected to be rolled over or refinanced by bilateral and commercial creditors, leaving approximately USD 11 billion in net payments.

The USD 7.3 billion in identified bilateral rollovers forms part of the wider refinancing arrangements. Extending these facilities would help Pakistan manage near-term repayment pressures, although the obligations would remain outstanding.

Aurangzeb also said Pakistan expects the International Monetary Fund's (IMF) Executive Board to meet in December to consider the next disbursement.

Pakistan could receive approximately USD 1.21 billion following approval of the fourth review under the Extended Fund Facility and the third review under the Resilience and Sustainability Facility.

The IMF reached a staff-level agreement with Pakistan in October, but the disbursement remains subject to approval by its Executive Board.

The expected IMF funding, together with bilateral rollovers and other financing arrangements, would help Pakistan manage its external obligations amid substantial debt repayments during the current fiscal year.