ISLAMABAD: Pakistan signed an agreement with the Saudi Fund for Development (SFD) on Monday to defer a $1.2 billion payment on the country’s oil imports for one year.
Prime Minister Shehbaz Sharif and SFD Chief Executive Officer Sultan Abdulrahman Al-Marshad witnessed the signing of two agreements totaling $1.61 billion, further strengthening economic ties between the two nations.
Under the Oil Import Financing Facility, Pakistan will receive petroleum products on a deferred payment basis for a year. “This project will enhance Pakistan’s economic resilience by ensuring a stable supply of petroleum products while easing immediate fiscal pressures,” a government statement said.
Additionally, both sides signed a concessional loan agreement worth $41 million for the construction of a gravity-flow water scheme in Mansehra. The project is expected to benefit approximately 150,000 people in the region.
Petroleum products, primarily imported from Saudi Arabia, constitute a significant portion of Pakistan’s import bill. The deferred payment facility is expected to help Pakistan bolster its foreign exchange reserves ahead of the first review of a $7 billion IMF bailout in March.
SFD Delegation Meets Prime Minister
Following the signing ceremony, the SFD delegation met with Prime Minister Shehbaz Sharif and provided updates on ongoing Saudi-funded projects, including the Mohmand Multi-purpose Hydropower Project, Golan Gol Hydropower Project, and Malakand Regional Development Project.
The prime minister welcomed the delegation and praised the strong bilateral ties between Pakistan and Saudi Arabia, as well as SFD’s contributions to Pakistan’s development in health, energy, infrastructure, and education. He also acknowledged Saudi assistance in reconstruction efforts following the 2022 floods.
Shehbaz Sharif emphasized the importance of expediting new projects related to green energy and infrastructure, stating that their implementation would support Pakistan’s economic recovery and benefit local communities.
In response, the SFD CEO assured prompt processing of the proposed projects and reiterated Saudi Arabia’s commitment to providing continued financial and developmental support to Pakistan under the leadership of the Saudi royal family.
