1737100823-0%2Fsidra--(7)1737100823-0.png&w=3840&q=100)
Pakistan signs '$1b' loan facility
The Ministry of Finance signed a five-year long-term financing facility for $1 billion, the government said in a statement on Wednesday.
The financing is led by Dubai Islamic Bank and Standard Chartered, and the Islamic tranche forms 89% of the loan facility, according to the statement.
"The Ministry of Finance has signed a syndicated term finance facility of $1,000 million partially guaranteed by a Policy-Based Guarantee of the ADB Programme 'Improved Resource Mobilisation & Utilisation Reform'," according to a press release.
"The facility is a landmark transaction for the Government of Pakistan that demonstrates strong support from leading financiers in the region. This is a five-year multi-tranche facility including both Islamic and conventional tranches," it said.
The finance ministry said that the Islamic facility was structured to be fully compliant with AAOIFI standards, and accounts for 89 per cent of the total financing amount, and the remaining 11pc was from conventional financing.
It added, "The transaction was also the first facility supported by ADB's Policy-Based Guarantee linked to policy reform measures undertaken by an ADB Member Country, i.e Pakistan."
"The ADB programme is designed to support Pakistan to build long-term fiscal resilience and stability and has supported Pakistan's re-entry into international commercial markets, with significant interest from Middle Eastern Banks," the press release read.
Meanwhile, the ministry announced that it successfully raised over Rs1.2 trillion through a major auction of government bonds held on Wednesday.
This includes the launch of a new 15-year Zero Coupon Bond, the first of its kind in Pakistan, which received strong demand from investors and raised over Rs47 billion.
This new bond does not pay interest every year. Instead, investors receive a lump sum at the end of 15 years. This helps the government reduce short-term repayments and plan finances better. The strong response shows that investors are confident in Pakistan's economy and reforms.
This move is part of the government's broader strategy to reduce borrowing risks, extend the repayment period of debt, and promote Islamic and long-term financial products. Yields on other government bonds also dropped, indicating optimism in financial markets about falling inflation and lower interest rates in the future.
Pakistan's debt is now becoming more stable. The average repayment period of domestic debt has increased from 2.7 years last year to 3.75 years now, reducing the pressure to repay loans quickly. Moreover, more pension funds and insurance companiesrather than just banksare now investing in government bonds. This helps spread financial risk and deepen the local investor base.
Finance Minister Senator Muhammad Aurangzeb said: "This is a major step forward in making Pakistan's financial system stronger and more resilient. We are introducing new, smart ways of borrowing that reduce risk and give investors more options. Our aim is to manage public debt responsibly, promote Islamic finance, and attract more long-term investment to support the country's economic growth."
The Ministry of Finance is also working on more products to allow ordinary citizens to invest in government bonds, especially Islamic ones, to encourage savings and financial inclusion.
Despite global uncertainties, today's auction shows that Pakistan's economy is gaining investor trust and moving in the right direction.
With additional input from Irshad Ansari
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
36 minutes ago
- Business Recorder
In meeting with COAS Munir, Trump lauds Pakistan's ongoing efforts for regional peace, stability
US President Donald Trump in a meeting with Chief of Army Staff (COAS) Field Marshal Syed Asim Munir lauded Pakistan's ongoing efforts for regional peace and stability, and appreciated the robust counter-terrorism cooperation between the two states. President Trump was accompanied by Secretary of State Senator Marco Rubio, and Steve Witkoff, the US Special Representative for Middle Eastern Affairs, while Field Marshal Asim Munir was joined in by Pakistan's National Security Advisor,' the Inter-Services Public Relations (ISPR) said in a press release today. The ISPR said that although initially scheduled for one hour, the meeting extended for over two hours, underscoring the depth and cordiality of the dialogue. During the meeting, the army chief conveyed the deep appreciation of Pakistan for President Trump's constructive and result-oriented role in facilitating a ceasefire between Pakistan and India in the recent regional crisis. 'The COAS acknowledged President Trump's statesmanship and his ability to comprehend and address the multifaceted challenges faced by the global community,' said the statement. The two sides also discussed avenues for expanding bilateral cooperation in multiple domains including trade, economic development, mines and minerals, artificial intelligence, energy, cryptocurrency, and emerging technologies. 'President Trump expressed keen interest in forging a mutually beneficial trade partnership with Pakistan based on long-term strategic convergence and shared interests,' said ISPR. President Trump commended the Field Marshal's leadership and decisiveness during a period of complex regional dynamics. Bilawal sees COAS-Trump talks as positive step The two sides also held a detailed exchange of views on the prevailing tensions between Iran and Israel, with both leaders emphasizing the importance of resolution of the conflict. Field Marshal Syed Asim Munir extended an invitation to President Trump, on behalf of the Government of Pakistan, to undertake an official visit to Pakistan at a mutually convenient date. 'The engagement marks a significant moment in the ongoing efforts to reinforce the longstanding partnership between Pakistan and the United States, built upon shared objectives of peace, stability, and prosperity,' the press release added. On Wednesday, President Trump hosted Pakistan's army chief for lunch. The meeting, listed on the president's official schedule, was held in the Cabinet Room and closed to the press.
Express Tribune
5 hours ago
- Express Tribune
Govt unveils major plan to end Rs1.2tr circular debt
The federal cabinet on Wednesday gave the green light to Pakistan's largest financial restructuring scheme aimed at eliminating the crippling circular debt in the power sector. Prime Minister Shehbaz Sharif chaired the federal cabinet meeting at the Prime Minister House and approved a series of key decisions ranging from energy sector reforms to diplomatic and institutional recognitions, a Prime Minister's Office news release said. The Debt Plan, designed to restore financial stability in the energy industry without burdening the national budget, aims to eliminate Rs1,275 billion in circular debt over the next six years. The approved scheme includes refinancing Rs683 billion owed by the Power Holding Company and clearing long-standing dues of Independent Power Producers (IPPs). The Prime Minister termed the decision a "historic step toward economic stability and investor confidence in Pakistan's energy sector." "This reflects our commitment to sustainable institutional reforms and reducing fiscal pressure, paving the way for a more stable and prosperous energy future," he said during the session. The cabinet also extended appreciation to Finance Minister Muhammad Aurangzeb and his economic team for presenting a public-friendly budget for the upcoming fiscal year, acknowledging their efforts in stabilizing the national economy. On the diplomatic front, Prime Minister Shehbaz Sharif lauded Chief of Army Staff Field Marshal Syed Asim Munir for his address to the Pakistani diaspora during his recent US visit. The prime minister commended the Field Marshal's firm commitment to defending Pakistan's borders and interests, calling it a powerful representation of national resolve. In recognition of exemplary Hajj arrangements this year, the prime minister paid tribute to Minister for Religious Affairs Sardar Yousaf, citing the well-managed pilgrimage as a reflection of the government's commitment to public service excellence. In other key decisions, the cabinet approved the appointment of Kamal Uddin Tipu as Chairperson of the Commission for the Protection of Journalists and Media Professionals on the recommendation of the Ministry of Human Rights. The cabinet also granted exemption under Section 21 of the Public Procurement Regulatory Authority Ordinance, 2002, to the National Power Parks Management Company Limited (NPPMCL) for procurement related to the acquisition of Rousch Power Plant. Additionally, the cabinet ratified the decisions taken during the Cabinet Committee on Legislative Cases meeting held on May 21, 2025.
Express Tribune
5 hours ago
- Express Tribune
Pakistan signs '$1b' loan facility
The Ministry of Finance signed a five-year long-term financing facility for $1 billion, the government said in a statement on Wednesday. The financing is led by Dubai Islamic Bank and Standard Chartered, and the Islamic tranche forms 89% of the loan facility, according to the statement. "The Ministry of Finance has signed a syndicated term finance facility of $1,000 million partially guaranteed by a Policy-Based Guarantee of the ADB Programme 'Improved Resource Mobilisation & Utilisation Reform'," according to a press release. "The facility is a landmark transaction for the Government of Pakistan that demonstrates strong support from leading financiers in the region. This is a five-year multi-tranche facility including both Islamic and conventional tranches," it said. The finance ministry said that the Islamic facility was structured to be fully compliant with AAOIFI standards, and accounts for 89 per cent of the total financing amount, and the remaining 11pc was from conventional financing. It added, "The transaction was also the first facility supported by ADB's Policy-Based Guarantee linked to policy reform measures undertaken by an ADB Member Country, i.e Pakistan." "The ADB programme is designed to support Pakistan to build long-term fiscal resilience and stability and has supported Pakistan's re-entry into international commercial markets, with significant interest from Middle Eastern Banks," the press release read. Meanwhile, the ministry announced that it successfully raised over Rs1.2 trillion through a major auction of government bonds held on Wednesday. This includes the launch of a new 15-year Zero Coupon Bond, the first of its kind in Pakistan, which received strong demand from investors and raised over Rs47 billion. This new bond does not pay interest every year. Instead, investors receive a lump sum at the end of 15 years. This helps the government reduce short-term repayments and plan finances better. The strong response shows that investors are confident in Pakistan's economy and reforms. This move is part of the government's broader strategy to reduce borrowing risks, extend the repayment period of debt, and promote Islamic and long-term financial products. Yields on other government bonds also dropped, indicating optimism in financial markets about falling inflation and lower interest rates in the future. Pakistan's debt is now becoming more stable. The average repayment period of domestic debt has increased from 2.7 years last year to 3.75 years now, reducing the pressure to repay loans quickly. Moreover, more pension funds and insurance companiesrather than just banksare now investing in government bonds. This helps spread financial risk and deepen the local investor base. Finance Minister Senator Muhammad Aurangzeb said: "This is a major step forward in making Pakistan's financial system stronger and more resilient. We are introducing new, smart ways of borrowing that reduce risk and give investors more options. Our aim is to manage public debt responsibly, promote Islamic finance, and attract more long-term investment to support the country's economic growth." The Ministry of Finance is also working on more products to allow ordinary citizens to invest in government bonds, especially Islamic ones, to encourage savings and financial inclusion. Despite global uncertainties, today's auction shows that Pakistan's economy is gaining investor trust and moving in the right direction. With additional input from Irshad Ansari
