Saudi Arabia has pledged a $1 billion oil financing facility and the renewal of $5 billion in time deposits to support Pakistan’s economic stability during the fiscal year 2025-26, according to multiple media reports citing the Ministry of Finance.
The $1 billion oil facility will be used to import oil, with Saudi Arabia providing around $100 million per month in supplies, amounting to approximately Rs28.37 billion in local currency. The facility has already helped Pakistan secure over Rs85 billion worth of oil supplies in the first quarter of the fiscal year, with a continued focus on addressing the country’s energy needs.
The $5 billion deposit renewal, which carries an annual interest rate of 4%, is meant to stabilise Pakistan’s external account and ensure the continued support of the Saudi government. These deposits are part of Saudi Arabia’s long-standing financial assistance to Pakistan, which has been critical in maintaining the country’s fiscal health.
Saudi Arabia has also reaffirmed its commitment to strengthening ties with Pakistan by entering into a long-term economic partnership that includes investments in infrastructure and participation in China-Pakistan Economic Corridor (CPEC) projects.
According to reports, the agreement was formalised during a meeting between Prime Minister Shehbaz Sharif and Saudi Crown Prince Mohammed bin Salman in Riyadh, where both sides discussed a range of mutual interests and regional cooperation.Â
The session was attended by senior officials from both countries, including Deputy Prime Minister and Foreign Minister Ishaq Dar, Chief of Army Staff Field Marshal Syed Asim Munir, and cabinet members from both nations.
As part of the agreement, Saudi Arabia will invest in critical infrastructure projects in Pakistan, notably in dam construction and power transmission lines. Furthermore, both countries have agreed to establish a joint business council aimed at fostering collaboration between their private sectors.
In a post-meeting statement on X, Prime Minister Shehbaz Sharif expressed his appreciation for the Crown Prince’s unwavering support and commitment to advancing the bilateral partnership. He acknowledged the enduring strength of the Pakistan-Saudi Arabia ties, emphasizing that the discussions would contribute to deepening the historic cooperation in trade, investment, and economic growth.
Prime Minister Shehbaz Sharif’s visit to Riyadh, at the Crown Prince’s special invitation, was part of his attendance at the 9th Future Investment Initiative (FII) Conference. Upon his arrival at King Khalid International Airport, he was warmly received by top Saudi officials, including the Deputy Governor of Riyadh, Prince Mohammed bin Abdulrahman bin Abdulaziz.
While in Riyadh, the Prime Minister is representing Pakistan at the FII Conference, which serves as a platform for global investors, policymakers, and corporate leaders to discuss emerging trends and investment opportunities. He is also scheduled to meet with world leaders and heads of international organizations on the sidelines of the event.
