Pakistan, Saudi Arabia Sign $1.61 bn Agreements to Boost Economic Cooperation

Pakistan to receive $1.2 billion worth of oil on deferred payment for one year.

Mon Feb 03 2025
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ISLAMABAD: Pakistan and Saudi Arabia on Monday signed two agreements worth $1.61 billion to further enhance economic cooperation, including deferred oil payments and funding for a key infrastructure project.

Under the agreements, the Saudi Fund for Development (SFD) would defer by one year a $1.2 billion payment on the country’s oil imports and provide a concessional loan for the construction of a gravity-flow water scheme in Khyber Pakhtunkhwa province amounting to $41 million, the prime minister’s office said.

Prime Minister Muhammad Shehbaz Sharif and Chief Executive Officer of Saudi Fund for Development (SFD) Sultan Abdulrahman Al-Marshad witnessed the signing of the agreements, Pakistan’s state news agency APP reported.

Pakistan’s Secretary of Economic Affairs Division Dr. Kazim Niaz and CEO of SDF Sultan bin Abdul Rehman Al Marshad signed the agreements on behalf of their respective governments.

Pakistan’s Deputy Prime Minister and Foreign Minister Mohammad Ishaq Dar and Ambassador of the Kingdom of Saudi Arabia in Pakistan Nawaf bin Said Al-Malki were also present on the occasion.

The prime minister welcomed the signing of the Oil Import Financing Facility, under which Pakistan will receive $1.2 billion worth of oil on deferred payment for one year. This initiative aims to bolster Pakistan’s economic resilience by ensuring a stable petroleum supply while alleviating immediate fiscal pressures.

Additionally, the Saudi Fund for Development (SFD) will provide $41 million for the Gravity Flow Water Supply Scheme in Mansehra, Khyber Pakhtunkhwa. This project will improve access to clean drinking water for 150,000 residents and is designed to meet the needs of 201,249 people by 2040, enhancing public health and quality of life in the region.

Pakistan’s economic partnership with SFD

Pakistan Minister for Finance and Revenue, Senator Muhammad Aurangzeb during a meeting with the Chief Executive Officer (CEO) Saudi Fund for Development, Sultan Abdulrahman A. AlMarshad, shared updates on Pakistan’s macroeconomic stability, highlighting improvements in key economic indicators.

The minister expressed gratitude for the longstanding partnership between Pakistan and Saudi Arabia, emphasising the importance of Riyadh’s continued support in funding and investment, which has significantly contributed to Pakistan’s economic growth, APP reported.

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Prime Minister Shehbaz Sharif witnesses Signing of oil import financing / load agreement for gravity flow water scheme, Mansehra on 3rd Feb 2025 (Photo From PID)

He also recalled his recent meeting with Saudi Minister of Finance, Mohammed bin Abdullah Al-Jadaan, in Davos, and his extending an invitation to Pakistan to attend the first edition of the high-level annual conference on challenges and opportunities facing emerging market economies, which is being jointly organised by the International Monetary Fund (IMF) and the Kingdom of Saudi Arabia in Al-Ula, Saudi Arabia, on February 16-17, 2025.

The finance minister expressed his anticipation for the conference, noting the valuable insights he hoped to gain from the event and the leadership of Saudi Arabia in implementing Vision 2030.

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On the occasion, Sultan Abdulrahman A. AlMarshad lauded the progress Pakistan has made in terms of macroeconomic stability and growth, which has opened up numerous multi-purpose investment opportunities across various sectors.

He expressed Saudi Arabia’s need for a skilled workforce to meet the demands of its growing market.

The meeting underscored the strong ties between Pakistan and Saudi Arabia and set the stage for further economic collaboration, with a focus on investment, workforce development, and expanding bilateral cooperation.

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