Saudi Arabia to provide $6b financial aid to Pakistan through cash deposit, deferred payment

Saudi Arabia has agreed to provide Pakistan $3 billion in foreign currency support for a year to address its balance-of-payments crisis, the government announced on Tuesday.

The Kingdom has also agreed to provide Islamabad a one-year deferred payment facility for import of oil, worth up to another $3 billion.

The agreements in this regard were signed during the visit of Prime Minister Imran Khan to Saudi Arabia to attend the Future Investment Initiative (FII) conference, a trip he undertook on the invitation of King Salman bin Abdul Aziz Al-Saud.

According to a press release issued by the government, several far-reaching decisions on bilateral economic and financial cooperation were reached during the discussions held between Pakistani and Saudi officials:

It was agreed that Saudi Arabia will place a deposit of US $3 billion for a period of one year as balance-of-payment support. A memorandum of understanding (MoU) was signed in this regard between Finance Minister Asad Umar and his Saudi counterpart Muhammad Abdullah Al-Jadaan.
It was also agreed that a one-year deferred payment facility for import of oil, up to $3 billion, will be provided by Riyadh. This arrangement will be in place for three years, after which it will be reviewed.
Saudi Arabia also “confirmed its interest” in investing in a petroleum refinery in Pakistan. An MoU for this project will be signed after obtaining the cabinet’s approval.
The Kingdom also expressed interest in the development of mineral resources in Pakistan. In this regard, the federal government will hold consultations with the Balochistan government, following which a Saudi delegation will be invited to Pakistan to finalise matters.