Islamabad: In an initiative to help Islamabad address its balance of payments challenge, United Arab Emirates (UAE) Crown Prince Sheikh Mohammed bin Zayed Al Nahyan is expected to officially announce a support package of about 6.2 billion dollar for Pakistan during his two-day visit to the country on Sunday,
The package involves 3.2bn dollar worth of oil supplies on deferred payment, besides a 3bn dollr cash deposit, a cabinet member said, according to Dawn.
He said that the UAE’s package was exactly of the same size and terms and conditions as given by Saudi Arabia. The UAE package was finalised on Thursday evening, he said.
With this, Pakistan would get a total saving of about 7.9bn dollar on oil and gas imports from the two friendly countries — accounting for more than 60 per cent of annual oil import bill of about 12-13bn dollar, he said. This includes about 3.2bn dollar each of oil supplies on deferred payments from the UAE and Saudi Arabia and about 1.5bn dollar trade finance from the International Islamic Trade Finance Corporation (ITFC).
The total financing support from the UAE and Saudi Arabia, including the ITFC’s trade finance, would be around 13.9-14bn dollars when cash deposits of 3bn dollar each from the two countries were also included, he said.
This is in addition to a deep-conversion oil refinery to be set up by Parco — a joint venture of Pakistan and Abdu Dhabi — worth 5-6bn dollar at Khalifa Point and an expected petro-chemical complex by Saudi Arabia at Gwadar Oil City.
On top of that, the government has also started back channel discussions with Qatar for some relief in terms of reduction in LNG prices or a relaxed payment schedule, but that is now at an early stage.
In reply to a question, the cabinet member said Pakistan was deepening relationships with all three friendly Islamic nations without compromising bilateral ties for geo-political reasons.
He said the UAE crown prince would be paying a two-day visit, adding that all arrangements had been finalised in this regard.
He said Saudi Crown Prince Mohammad bin Salman was expected to arrive in the country in the first week of February and an MoU for establishing a petro-chemical complex was still being worked out on the request of Riyadh.
Pakistan has already received 2bn dollar in cash deposit from Saudi Arabia at an interest rate of 3.18pc while the third tranche of 1bn dollar is due in the first week of February. The Saudi oil facility would also start rolling out this month with an average 274 million dollar per month, the newspaper added.