Following confirmation to the International Monetary Fund (IMF) regarding an oil facility, a high-level delegation from the Kingdom of Saudi Arabia (KSA) is expected to visit Pakistan by December 2024 to finalize the modalities of a $1.2 billion Saudi Oil Facility (SOF).
The Kingdom has confirmed a new SOF, facilitating the approval of a $7 billion Extended Fund Facility (EFF) from the IMF. Additionally, Pakistan has requested the IMF to augment loans with a $1 billion climate finance facility.
Top official sources confirmed to a national daily that the Saudi delegation will engage in discussions with Pakistani authorities in December to finalize the details of the SOF. Pakistan may propose a one-year deferred payment plan, with a monthly cash amount of $100 million over the next 12 months, with repayments starting the following year. The facility could potentially operate for three years, though the exact timeframe is yet to be determined.
In 2023, the Saudi Fund for Development (SFD) provided 901.25 million Saudi riyals for the construction of the Mohmand Dam. This hydropower project aims to enhance Pakistan’s energy security and development by generating 800 megawatts of energy and storing approximately 1.6 million cubic meters of water. The project will also help mitigate flood risks and combat climate change effects in the region.
The SFD committed 1.6 billion Saudi riyals to Pakistan in 2023, with 1.3 billion riyals disbursed for development projects. This includes 178.28 million riyals for Tarbela Dam repairs and 231.5 million riyals for irrigation and drainage along the Indus River banks. Overall, Saudi Arabia provided 3,491.65 million riyals for various projects in Pakistan, including the Makran Coastal Highway, Golen Gol and Neelum-Jhelum Hydropower Plants, and infrastructure reconstruction in the Malakand region.
