Following confirmation from the IMF regarding an oil facility, a high-level delegation from Saudi Arabia is set to visit Pakistan in December 2024 to finalize the details of a $1.2 billion Saudi Oil Facility (SOF).
Saudi Arabia has approved a new SOF, facilitating Pakistan’s bid for a $7 billion Extended Fund Facility (EFF) from the IMF. Additionally, Pakistan has requested an augmentation of loans with a $1 billion climate finance facility.
According to top officials, the Saudi delegation will engage with Pakistani authorities to finalize the terms of the new SOF. Pakistan is likely to propose that the SOF be extended for a year on deferred payment, with a cash injection of $100 million each month for the next 12 months, beginning repayment in the following calendar year. While this facility could remain in place for three years, the exact timeframe is still under discussion.
In 2023, the Saudi Fund for Development (SFD) allocated 901.25 million Saudi riyals for the construction of the Mohmand Dam. This hydropower project aims to enhance energy security and support development in Pakistan by generating 800 megawatts of energy and storing approximately 1.6 million cubic meters of water. It also aims to reduce flood risks and combat the effects of climate change in the region.
The SFD had committed a total of 1.6 billion Saudi riyals for Pakistan in 2023, of which 1.3 billion riyals were disbursed as development project grants. Specific projects included 178.28 million riyals for the repair of the Tarbela Dam and 231.5 million riyals for irrigation and drainage on the banks of the Indus River. Overall, Saudi Arabia has provided a total of 3.49165 billion Saudi riyals for various projects in Pakistan, covering initiatives such as the Makran Coastal Highway, Golen Gol Hydropower Plant, and infrastructure reconstruction in the Malakand region.
