Pakistan requests China, Saudi Arabia and UAE to rollover $12 billion loans

Pakistan has requested China, Saudi Arabia, and the United Arab Emirates to rollover loans totaling $12 billion for three years, Finance Minister Muhammad Aurangzeb said on Sunday.

Discussions will also be held with the countries to extend the maturity time of deposits, he added.

The minister said Pakistan will resolve its external financing gap before the IMF Executive Board’s meeting to discuss the approval of a new $7 billion loan programme.

Moreover, negotiations are ongoing with the Bank of China and the Industrial and Commercial Bank of China for new financing. “Working groups will be formed next week for the reprofiling of loans for Chinese energy projects,” Aurangzeb said.

These working groups will review each Independent Power Producer agreement separately and move towards amendments. A Chinese firm will be engaged for discussions on Chinese IPPs.

Pakistan and China are also holding discussions for the issuance of $1 billion Panda Bonds in the Chinese market, the minister shared. Initially, Panda Bonds worth $200 million will be issued in the current fiscal year.

Panda Bonds are Chinese yuan-denominated bonds issued by international companies to raise money mainly from Chinese investors.

Aurangzeb also said efforts were being made to reduce government expenditures by 20-25% from Rs890 billion.

The minister said some 4.9 million individuals with taxable income were currently outside the tax net. These individuals have been categorized into affluent, middle, and small categories, and notices were being sent to them.