Saudi Arabia, through the Saudi Fund for Development (SFD), has granted Pakistan a $1.2 billion facility to finance oil derivatives imports on deferred payment terms for one year. This financing is part of Saudi Arabia’s ongoing support to Pakistan, totalling approximately $6.7 billion for oil derivatives since 2019. The initiative aims to bolster Pakistan’s economy and address its fiscal challenges.
Additionally, both parties signed a $41 million development soft loan agreement to fund a project supplying drinking water to Mansehra. The project includes installing about 400 kilometres of water pipes, benefiting over 150,000 residents, and establishing a water treatment plant with a capacity of approximately 21,000 cubic meters per day. This effort seeks to reduce waterborne diseases in the region.
These agreements underscore the SFD’s commitment to addressing developmental challenges in various countries and highlight the importance of international cooperation for sustainable development. During the signing ceremony, Prime Minister Sharif and SFD Chief Al-Marshad discussed enhancing bilateral cooperation, focusing on financing critical sectors across Pakistan.
This development comes as Pakistan continues to seek external financing to stabilize its economy. In recent months, the country has secured commitments from key lenders, including China, Saudi Arabia, and the UAE, to roll over debt, aiding its financial stability as it awaits final approval of a new $7 billion loan program with the International Monetary Fund.
The deferred oil payment facility is expected to provide immediate fiscal relief to Pakistan, ensuring a stable supply of petroleum products and supporting the nation’s economic resilience.
