Pakistan plans $2 billion international bond issue as Saudi oil facility omitted from budget

Pakistan plans to raise $2 billion through Eurobonds, Sukuk and Panda bonds during 2026-27, while making no provision for financing under the Saudi Oil Facility in the new federal budget, The News reported, citing official sources in the Finance Division. 

According to budget documents, Pakistan has projected total external financing of $23.378 billion from multilateral and bilateral creditors, commercial banks, international bond issuances and other foreign inflows during 2026-27.

The government has estimated no receipts from the Saudi Oil Facility for the coming fiscal year, compared with the revised estimate of $1 billion for 2025-26.

Saudi Arabia’s oil financing arrangement expired in April 2026. Pakistan has requested its renewal, but no expected inflow has been included in the budget documents.

The government has separately shown bilateral deposits of $12 billion held by the State Bank of Pakistan without providing a country-wise breakdown.

According to sources, the deposits comprise $8 billion from Saudi Arabia and $4 billion from China.

Pakistan has budgeted $4.866 billion in loans from multilateral creditors during 2026-27.

The Asian Development Bank is expected to provide $1.68 billion, while $86.337 million has been projected from the Asian Infrastructure Investment Bank and $17.669 million from the European Investment Bank.

The government expects to receive $412 million from the World Bank’s International Bank for Reconstruction and Development and $1.43 billion from the International Development Association.

Other projected multilateral financing includes $39.75 million from the International Fund for Agricultural Development, $186.64 million from the Islamic Development Bank and $1 billion in short-term financing from the same institution.

Pakistan has also estimated $8.76 million from the OPEC Fund for International Development and $0.172 million from the United Nations.

Loans from bilateral partners have been projected at $400.42 million.

These include $97.64 million from China, $94 million from France, $50 million from Denmark, $47.18 million from Saudi Arabia and $29.224 million from South Korea.

The government also expects $23.889 million from the United States, $20.6 million from Kuwait, $15.9 million from Japan, $10.89 million from Germany, $5.32 million from Oman and $0.89 million from Italy.

Another $4.483 million has been included as a block allocation under bilateral financing.

Foreign commercial borrowing has been projected at $2.35 billion, while inflows through Naya Pakistan Certificates are estimated at $1.122 billion.

The International Monetary Fund is expected to disburse $530 million during 2026-27 under the Resilience and Sustainability Facility for climate-related financing. The amount has been recorded as budgetary support.

Disbursements under the IMF’s $7 billion Extended Fund Facility, however, are meant for balance-of-payments support and are recorded on the State Bank of Pakistan’s balance sheet rather than in the federal budget.