Cash-strapped Pakistan to receive additional $13 billion from China, Saudi Arabia

Finance Minister Ishaq Dar said that during Prime Minister Shehbaz Sharif’s recent visit to Beijing, the Chinese leadership promised to roll over $4 billion in sovereign loan

Cash-strapped Pakistan has secured about $13 billion in additional financial support from its traditional allies China and Saudi Arabia, Finance Minister Ishaq Dar has said, as the government tries to steady the country's weak economy.

Mr. Dar said that under the new financial support Pakistan would be getting about $9 billion from China and $4 billion from Saudi on top of assurances for about $20 billion in investments, the Dawn newspaper reported.

He said that during Prime Minister Shehbaz Sharif’s recent visit to Beijing, the Chinese leadership promised to roll over $4 billion in sovereign loans, refinance $3.3 billion commercial bank loans and increase currency swap by about $1.45 billion — from 30 billion yuan to 40 billion yuan. The total worked out at $8.75 billion.

"They promised the security of financial support,” Mr. Dar, who recently took over as the new Finance Minister of Pakistan from his predecessor Miftah Ismail, said and quoted Chinese President Xi Jinping as telling Mr. Sharif, “don’t worry, we will not let you down”.

These would be rolled over whenever they reach maturity, the Minister said, adding that about $200 million worth of commercial loans had already flowed in a few days back.

Responding to a question, Mr. Dar said the Chinese side had also agreed to fast-track the processing for a $9.8 billion high-speed rail project (Main Line-1) from Karachi to Peshawar and both sides would immediately activate their respective teams.

The Minister said he had also suggested a part of the outstanding dues of Chinese power producers to be converted into overall debt stock and had already cleared about Rs 160 billion in recent months.