Pakistan agrees with ITFC to review financing costs — The Express Tribune
Pakistan, in Bangkok, Thailand, agreed with the International Islamic Trade Finance Corporation (ITFC) to review the cost and volume of the remaining financing tranche. The parties’ technical teams are to examine possible changes that would align borrowing costs with the country’s improved market conditions, The Express Tribune reports.
The agreement was reached by Pakistan’s Minister for Finance and Revenue Muhammad Aurangzeb and ITFC CEO Adeeb Yousif Al-Aama during the IMF and World Bank annual meetings. The parties agreed to seek a mutually acceptable solution. Pakistan aims to replace expensive short-term loans with longer-maturity financing without increasing external debt.
Motorway and railway financing
Separately, Aurangzeb discussed financing for the M6 motorway with Abdulhamid Alkhalifa, president of the OPEC Fund for International Development. They discussed the already approved first tranche, a loan agreement that is still awaiting signing, and subsequent tranches. Alkhalifa invited the Pakistani minister to visit the fund and sign the project agreement.
The modernization of the ML-1 railway and electricity transmission infrastructure were also named as priorities for further cooperation.
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Panda Bonds and capital markets
At a meeting with Chinese Finance Minister Lan Foan, the Pakistani side discussed its debut Panda Bond issuance. Topics included regulatory support, credit enhancement by the Asian Infrastructure Investment Bank, a 2.5% coupon, and strong investor demand.
Aurangzeb said Pakistan intends to return to the Chinese capital market. The parties also considered the country’s return to the Eurobond market after a four-year break and new Panda Bond issuances under the approved 7.2 billion yuan program.
During a meeting with Moody's, the minister welcomed Pakistan’s recent rating upgrade and noted improved fiscal and external indicators, growing foreign exchange reserves, and reduced forward liabilities of the State Bank of Pakistan.
