After approving rail agreements for the Reko Diq project, the Economic Coordination Committee (ECC) of the Cabinet has directed the Ministry of Railways and Finance Division to submit a comprehensive execution and refinancing plan by March 30, 2026, Business Recorder reported, citing sources.
The Ministry of Railways informed the ECC that the Reko Diq Project has been declared a ‘qualified investment’ under the Foreign Investment (Promotion and Protection) Act, 2022. A dedicated rail link is critical for transporting copper-gold concentrate from the Balochistan mines to export points, ensuring commercial viability and efficient bulk transport across the 1,350 km route.
Surveys for potential rail connectivity, coordinated with the Reko Diq Mining Company (RDMC), recommended a route via Port Qasim linking ML-III and ML-I. Technical assessments and deliberations through Joint Working Groups have shaped the framework, covering train design, track access, operational responsibilities, and legal obligations.
On June 17, 2025, a committee chaired by the Minister for Economic Affairs approved a bridge financing arrangement of $390 million for the project, later sanctioned by the Prime Minister on August 8, 2025. The funding will support the upgradation of the Main Line-III (ML-3) from Nokundi to Rohri, which is currently unable to handle projected freight loads.
The Rail Development Agreement and Bridge Financing Agreement with RDMC stipulate a three-year tenure at an interest rate of SOFR + 250 bps, with the Government of Pakistan acting as guarantor. The principal and accrued interest will be repaid in a bullet payment at the end of the term. Both agreements have been vetted by the Ministry of Law and Justice, the Office of the Attorney General, and the Ministry of Foreign Affairs.
The ECC noted the need to securitise project income, with 40% expected from bond issuance and the remainder provided by the government. The committee directed the Finance Division to begin planning in the fourth quarter of FY26 to oversee all modalities.Â
It also instructed the Railways Division to share the Rail Development Agreement with the Finance Division and resubmit the case if any material changes occur.
Officials said the ECC emphasised that the Ministry of Railways and Finance Division must present a detailed execution and implementation plan, along with refinancing arrangements, by the end of March 2026 for final consideration.
