ISLAMABAD: Pakistan is actively pursuing two financial avenues to address its energy needs: securing syndicate financing from the Islamic Development Bank (IsDB) and attempting to revive the Saudi Oil Facility (SOF), which has faced delays despite extensive diplomatic efforts.
Prime Minister Shehbaz Sharif has made several visits to Saudi Arabia since taking office, yet the SOF remains unfinalized. Pakistan hopes to convince Riyadh to extend the SOF for 12 months, beginning in January or February 2025.
Simultaneously, Islamabad plans to formally request the International Islamic Trade Finance Corporation (ITFC), a unit of the IsDB, to increase its oil procurement financing from $400 million to $1–1.2 billion. However, this financing option could prove costly, potentially reaching an effective rate of 9–10%, factoring in the Secured Overnight Financing Rate (SOFR) of 4.59% plus additional charges.
Earlier, Pakistan received an oversubscribed ITFC facility of $267 million, surpassing the anticipated $200 million. Economic Affairs Minister Ahad Cheema confirmed both options remain under consideration, as Islamabad strives to secure critical funding to meet its energy demands.
Story by Mehtab Haider
