Pakistan secures $761mn loan for oil, LNG imports

The government Of Pakistan has signed a $761.5mn loan agreement with the International Islamic Trade Finance Corporation (ITFC), it said on November 10. The funds will be used to import oil, LNG and refined petroleum products.

The facility has been made effective immediately and ready for utilisation by Pakistan State Oil, Pak Arab Refinery and Pakistan LNG for import of oil and gas, the government said. It is for a period of one year and is a part of an umbrella framework agreement signed with ITFC in June this year for a total envelope of $4.5bn for a period of three years. Originally, ITFC had agreed to provide the financing of $300mn.

“However, due to growing energy needs of the country and enhanced confidence level of international financial institutions on economic reforms and recovery amid COVID-19 pandemic, the financing was oversubscribed by 2.5 times i.e. from $300mn to from $761.5mn,” the government said.

By financing oil and gas imports, the loan will also help ease pressure on Pakistan's foreign currency reserves, the government added.