Prime Minister Shehbaz Sharif and Finance Minister Muhammad Aurangzeb are set to meet with representatives from the Industrial and Commercial Bank of China (ICBC) and the Bank of China to secure a $600 million loan for Pakistan, high-level sources informed ProPakistani.
Previous attempts to obtain this loan amount have been unsuccessful. This time, discussions will focus on persuading the Chinese banks to relax their stringent loan disbursement conditions. Notably, these conditions include a high-interest rate of up to 8% and a requirement linking the loan to the payment schedule of Chinese Independent Power Producers (IPPs), sources added.
Since July 2023, the federal government has been engaged in continuous discussions to secure this loan. Efforts are ongoing to ensure that the $600 million loan is secured for the next financial year, sources further stated.
In November 2023, ProPakistani first reported that authorities were seeking $600 million in new loans, with $300 million each from the two Chinese banks.
It is worth mentioning that China has provided $21.2 billion in loans to Pakistan since 2000, accounting for 30% of the country’s overall funding. These loans have been crucial in helping Pakistan avoid default and boost its stagnating forex reserves.
