Saudi Arabia provides $380mln loan to Pakistan

ISLAMABAD: Pakistan and Saudi Arabia here on Tuesday signed three agreements worth $380 million for time deposit, import of fertilizer and hydropower generation.

Of these, two loan agreements pertained to the pledge made by Saudi Arabia during Donors Conference held in Tokyo on the backdrop of Friends of Democratic Pakistan meeting in which it pledged US$700 million for Pakistan.

The loan agreements were signed by Vice Chairman and Managing Director Saudi Fund for Development, Eng. Yousef Ibrahim Al-Bassam on behalf of Saudi Arabia and Secretary Economic Affairs Division, Sibtain Fazal Halim and Deputy Governor Sate Bank of Pakistan, Yaseen Anwar on behalf of Pakistan.

The first loan agreement is related to time deposit of US$200 million that Saudi Arabia would keep in State Bank of Pakistan.

It carries an interest rate of three months LIBOR and its repayment would be made in eight years including three years grace period.

On the occasion, Saudi Ambassador to Pakistan, Abdul Aziz Al-Ghadeer and Secretary Chairman WAPDA, Shakil Durani and Deputy Governor were also present at signing ceremony.

The second agreement from the pledged amount was export credit of US$100 million which would be utilized for import of urea fertilizer from Saudi Arabia.

A separate agreement would be inked between Trade Corporation of Pakistan and Saudi Arabia Basic Industries Corporation (SABIC), which will execute this agreement.

The loan of $100 million carries an interest rate of one year’s LIBOR plus 85 basis points and will be repayable after a period of two years.

The agreement to this effect was signed by Yousef Ibrahim Al-Bassam and Secretary EAD Fazal Halim.

The third agreement was co-financing of Neelum-Jhelum Hydropower Project which is regular on-going assistance form Saudi Arabia.

The Neelum-Jhelum Hydropower Project, with a donor-component of US$75 million, is co-finance by Saudi Arabia, Abdu Dhabi, Kuwait, Islamic Development Bank OPEC Fund and Chinese EXIM Bank.

Saudi Arabia would provide soft loan of US$80 million for this project.

The loan caries an interest rate of two percent and is payable in 20 years including grace period of six years.

Speaking on the occasion, Eng. Yousef Al-Bassam said that Saudi Arabia was keen to continue its cooperation with Pakistan and assist it in financing development projects in various sectors of economy.

He said that the signing of these agreements was a continuing process towards more stronger ties and cooperation between the two countries.

He said that the hydropower project aims to utilize the natural resources to contribute to providing power supply, which will assist in supporting the social-economic development in Pakistan.

Secretary EAD also spoke on the occasion and expressed the hope that the amount provided through these agreements would help promote the respective sectors.LINK....