ISLAMABAD: Pakistan’s Ambassador to Saudi Arabia Raja Ali Ejaz has said work on a $10 billion oil refinery project to be set up by Saudi Arabia in Pakistan’s southwestern Baluchistan province would start “very soon.”
During a visit by Saudi Crown Prince Mohammad bin Salman to Islamabad last year, Pakistan and Saudi Arabia signed short-, mid- and long-term investment agreements worth $21 billion. Among the deals was a $10 billion oil refinery in Gwadar and an attached one billion dollar petrochemical complex.
“The Saudi investment minister has informed me that the Kingdom is very serious about this mega project and will start work on it very soon,” Ejaz, who met M. Khalid Al-Falih, the Saudi minister of investment in Riyadh on Wednesday, told Arab News in a phone interview on Thursday.
He said work on the project had slowed down due to the pandemic and a dip in oil prices, which had put pressure on the Saudi economy. Oil prices have gone down from almost $80 per barrel to around $30 per barrel in recent months.
“He [Saudi investment minister] expressed his hope that the work on [the oil refinery] project will start as soon as the global situation will improve as it’s a mega project which required around $10 billion investment,” Ejaz said.
He said he and Al-Falih discussed a range of economic and investment issues of common interest to the two nations as well as “ways and means to strengthen bilateral economic ties.”
“I took the lead from the last year visit of Saudi Crown Prince to Pakistan in which many agreements were signed between the two countries in the field of petrochemicals, energy and minerals,” Ejaz said.
A $2 billion deal for the minerals sector was also signed during the crown prince’s visit, and Ejaz said two Saudi companies had already shown interest in investing in exploration.
“A Saudi delegation visited Pakistan for exploring opportunities for investment in mineral exploration in September last year,” he said. “Two Saudi companies Ma’adin and ACWA power have shown their interest to invest in mineral resources in Pakistan.”
Sectors of interest for mining were Zinc, Iron, Copper and Gold, the envoy said, adding: “Our mission has shared required information regarding this with these companies as well as Saudi government. We discussed how to proceed on it and expedite the process, so that these companies can come to Pakistan at the earliest.”
Ejaz also said the Kingdom would receive full “technical support” from Pakistan to fulfill Saudi Arabia’s vision 2030, a grand plan by the Saudi government to diversify its economy beyond oil.
“As it included many infrastructure and other development projects, so I asked to the minister to consider utilizing Pakistani technical experts and general manpower in these projects,” Ejaz said.
He said the Saudi minister’s response was “very positive” and he assured his full support.
International relations expert Khalid Rehman, who is the director general of the Institute of Policy Studies, said direct interactions between Saudi and Pakistani leaders were “necessary.”
“It is a positive thing that both countries have increased direct interaction,” Rehman said. “To avoid any misunderstanding direct interactions between the two countries are very necessary.”
Seven memorandum of understanding were signed between Pakistan and Saudi Arabia during the visit of the crown prince.
Short-term projects include two Re-Gasified Liquefied Natural Gas plants for $4 billion, a $2 billion investment by Saudi power producing company ACWA Power in Pakistan’s renewable energy sector and a $1 billion Saudi Fund for Pakistan.
Mid-term projects include $1 billion each for petrochemical and food and agricultural projects. The long-term investments are $10 billion for the construction of the multi-billion-dollar Saudi Aramco oil refinery in Gwadar and $2 billion for the minerals sector.
The total investment comes to $21 billion, according to Pakistan government figures.
Work on $10 bln Saudi Aramco refinery project to begin 'very soon' — Pakistani envoy
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Work on $10 bln Saudi Aramco refinery project to begin 'very soon' — Pakistani envoy
- Says two Saudi companies Ma’adin and ACWA power had shown interest in investing in mineral resources in Pakistan
- Raja Ali Ejaz meets Saudi minister of investment, discusses ways to enhance economic ties
IMF board to approve Pakistan reviews today ‘if all goes well,’ say officials
- IMF’s executive board is scheduled to meet today to discuss the disbursement of $1.2 billion
- Economists say the money will boost Pakistan’s forex reserves, send positive signals to investors
KARACHI: The International Monetary Fund’s (IMF) executive board is scheduled to meet today, Monday, to approve the release of about $1.2 billion for Pakistan under the lender’s two loan facilities, said IMF officials who requested not to be named.
The IMF officials confirmed the executive board was going to decide on the Fund’s second review under the $7 billion Extended Fund Facility (EFF) and first review under the $1.4 billion Resilience and Sustainability Facility (RSF), a financing tool that provides long-term, low-cost loans to help countries address climate risks.
“The board meeting will be taking place as planned,” an IMF official told Arab News.
“The board is on today yes as per the calendar,” said another.
A well-placed official at Pakistan’s finance ministry also confirmed the board meeting was scheduled today to discuss the next tranche for Pakistan.
The IMF executive board’s meeting comes nearly two months after a staff-level agreement (SLA) was signed between the two sides in October.
Procedurally, the SLAs are subject to approval by the executive board, though it is largely viewed as a formality.
“If all goes well, the reviews should pass,” said the second IMF official.
On approval, Pakistan will have access to about $1 billion under the EFF and about $200 million under the RSF, the IMF said in a statement in October after the SLA.
The fresh transfer will bring total disbursements under the two arrangements to about $3.3 billion, it added.
Experts see smooth sailing for Pakistan in terms of the passing of the two reviews, saying the IMF disbursements will help the cash-strapped nation to strengthen its balance of payments position.
Samiullah Tariq, group head of research at Pakistan Kuwait Investment Company Limited, said the IMF board’s approval will show that Pakistan’s economy is on the right path.
“It obviously will help strengthen [the country’s] external sector, the balance of payments,” he told Arab News.
Until recently, Pakistan grappled with a macroeconomic crisis that drained its financial resources and triggered a balance of payments crisis.
Pakistan has reported financial gains since 2022, recording current account surpluses and taming inflation that touched unprecedented levels in mid-2023.
Economists also viewed the IMF’s bailout packages as crucial for cash-strapped Pakistan, which has relied heavily on financing from bilateral partners such as Saudi Arabia, China and the United Arab Emirates, as well as multilateral lenders.
Saudi Arabia, through the Saudi Fund for Development, last week extended the term of its $3 billion deposit for another year to help Pakistan boost its foreign exchange reserves, which stood at $14.5 billion as of November 28, according to State Bank of Pakistan statements.
“In our view this [IMF tranche] will be approved,” said Shankar Talreja, head of research at Karachi-based brokerage Topline Securities Limited.
“This will help strengthen reserves and will eventually help a rating upgrade going forward,” he said.
The IMF board’s nod, Talreja said, would also send a signal to the international and local investors regarding the continuation of the reform agenda by Pakistan’s government.
