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CDB contributes to RMB 15 billion loan to shore up Pakistan’s foreign exchange reserves in March 2019
| Funder | China Development Bank (CDB) |
|---|---|
| Recipient Organization | State Bank of Pakistan (SBP) |
| Country | Pakistan |
| Start Date | Mar 19, 2019 |
| End Date | Apr 19, 2027 |
| Duration | 2,953 days |
| Number of Grantees | 1 |
| Roles | Recipient |
| Data Source | AidData Chinese Aid |
| Grant ID | 57695 |
Grant Description
BoC, ICBC, and CDB contributions to RMB 15 billion syndicated facility for shore up Pakistan’s foreign exchange reserves in 2019 On March 19, 2019, China Development Bank (CDB), Bank of China (BoC), and the Industrial and Commercial Bank of China (ICBC) signed an RMB 15 billion ($2.1837 billion) facility (loan) agreement with the State Bank of Pakistan (SBP) to shore up the country’s foreign exchange reserves.
The estimated contributions from CDB, ICBC, and BoC are captured via Record ID#57695, Record ID#98785, and Record ID#98786, respectively.
The loan fully disbursed, and when it reached maturity in March 2022, it was fully repaid.
Then, on June 22, 2022, CDB, BoC, and ICBC and the State Bank of Pakistan signed an RMB 15 billion ($2,240,310,000) syndicated rollover facility (loan) agreement to shore up the country’s foreign exchange reserves.
The estimated contributions from CDB, BoC, and ICBC are captured via Record ID#96215, Record ID#105360, and Record ID#105361, respectively.
The loan had fully disbursed by June 24, 2022.
Prior to the signing of the June 2022 loan agreement, CDB told the State Bank of Pakistan that (a) future loan proceeds 'could not be used' (i.e. the proceeds from a rollover facility could only be used to bolster gross reserves and serve as 'window dressing') due to weakening of the external sector position of Pakistan, and (b) it expected the Government of Pakistan to remain in good standing with the International Monetary Fund.
However, when the June 2022 loan agreement was finalized, CDB authorized the borrower to freely use the proceeds of the loan (including for external debt service and foreign reserve accumulation).
Staff Comments
- Record ID#54767 is an umbrella record that captures the $2.53 billion commitment from ICBC and CDB in 2019 to shore up the Pakistan’s foreign exchange reserves.
- The Economic Affairs Division (EAD) within Pakistan’s Ministry of Finance identifies the purpose of this loan as balance of payments (BOP) support.
- For loan and debt rescheduling records with variable interest rates, AidData calculates the all-in interest rate at T0 based on the reference rate (such as LIBOR or EURIBOR) on the loan start date, plus any known margin. Please see the methodology for additional details.
- More information regarding the June 2022 loan can be found via https://www.finance.gov.pk/supplement_2021_22.pdf and https://tribune.com.pk/story/2362848/23b-loan-deal-inked-with-china and https://tribune.com.pk/story/2363132/china-deposits-23-billion-to-boost-sbp-reserves and https://twitter.com/MiftahIsmail/status/1540307883799506944 and https://www.thenews.com.pk/print/963562-cabinet-approves-terms-for-2-4bn-loan-from-china5. The exact size of CDB, Bank of China, and ICBC’s respective financial contributions to the 15 billion RMB syndicated bridge loan are unknown. For the time being, AidData assumes that all 3 members of the lending syndicate contributed equal amounts (RMB 5 billion).
Sources & References
- 中国向巴基斯坦提供35亿美元贷款和补助金
- China leads with 75% share in total foreign loans, 2018-2019 Pakistan Economic Survey: Statistical Supplement, 2019-2020 Pakistan Economic Survey
- Status Report July-June 2018-19 on 21-August-2019
- China to lend Pakistan $2.1b in commercial loan next week
- July-March 2019: $3.147 billion borrowed from foreign banks
- Statistical Supplement: Pakistan Economic Survey
- Summaries of Commitments & Disbursements
- Cash-strapped Pakistan says China agreed to roll over $4.2 bn debt
- STATISTICAL SUPPLEMENT, $2.3b loan deal inked with China
- China Deposits 23 Billion to Boost SBP Reserves
- Miftah Ismail on Twitter
- Cabinet approves terms for $2.4bn loan from China
- Pakistan Economic Survey 22-23 Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.
All Grantees
State Bank of Pakistan (SBP)
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