A high-ranking delegation from the Kingdom of Saudi Arabia (KSA) is scheduled to visit Pakistan in December 2024 to finalize the details of the $1.2 billion oil facility agreement, The News reported, citing top official sources.
This confirmation from KSA is crucial for Pakistan as it aids in securing a $7 billion Extended Fund Facility (EFF) from the IMF. Additionally, Pakistan is seeking to augment this arrangement with a $1 billion climate finance facility from the IMF.
During their visit in December, the Saudi delegation will discuss the terms of the new oil facility. Pakistan plans to request the facility on a deferred payment basis, suggesting a monthly cash flow of $100 million for the next 12 months, with repayments commencing the following calendar year.Â
While the arrangement could potentially extend over three years, its exact duration remains to be determined.
In 2023, the Saudi Fund for Development (SFD) contributed 901.25 million Saudi Riyal (SR) towards the construction of the Mohmand Dam, a project designed to bolster Pakistan’s energy security and support regional development.Â
The project will not only generate 800 megawatts of electricity but will also provide a sustainable water source for both human consumption and agricultural use, help mitigate flood risks, and address climate change impacts in the area.
The SFD allocated a total of 1.6 billion SR to Pakistan in 2023, with 1.3 billion SR disbursed in the form of development grants. Among the projects supported, the Tarbela Dam received 178.28 million SR for repairs and Phase I of the Irrigation and Drainage project for lands along the Indus River banks was allocated 231.5 million SR.Â
Overall, the KSA granted 3491.65 million SR for various development initiatives in Pakistan, including infrastructure projects like the Makran Coastal Highway, Golen Gol Hydropower Plant, Neelum-Jhelum Hydropower Plant, Malakand region infrastructure reconstruction, and additional support for ongoing hydropower projects.
