China’s SAFE provides $500 million deposit loan in June 2012 to shore up Pakistan's foreign exchange reserves

📋 Staff Comments

1. For the time being, AidData relies on the borrowing terms (8-year maturity, 8-year grace period, and 2.068% interest rate) that the Government of Pakistan voluntarily disclosed to the World Bank's Debtor Reporting System (DRS). See https://www.dropbox.com/s/2sw4f7gluxa52fk/DRS%20Official%20Commitments%20from%20China%20Through%202021.xlsx?dl=0 and https://www.dropbox.com/s/ab8qt4n6jijcbhd/IDS_Average%20interest%20on%20new%20external%20debt%20commitments.xlsx?dl=0 and https://www.dropbox.com/s/949n5rctiue6d7c/IDS_Average_grace_period_and_maturity_on_new_external_debt_commitments.xlsx?dl=0. However, some sources suggest that loan's original maturity length may have been 6-years and it may the loan may been rolled over in the 7th year and 8th year after the original commitment date. These sources indicate that the loan was repayable semi-annually and it was originally scheduled to mature in January 2018. This issue warrants further investigation.
2. 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.
3. The Government of Pakistan loan identification number is CHINA2012 4. The Fiscal Year 2013 Annual Report of SBP identifies ‘two long-term deposits of USD 500 million each received from the State Administration Foreign Exchange (SAFE) China in January 2009 (rolled-over in January 2013) and June 2012 carrying interest at six months LIBOR plus 100 bps and twelve months LIBOR plus 100 bps respectively, both payable semi-annually. These deposits of USD 500 million each have been set off against the rupee counterpart receivable from the Federal Government and have been covered under Ministry of Finance (MoF) Guarantees dated February 7, 2013 and June 29, 2012 whereby the MoF has agreed to assume all liabilities and risks arising from the Group's agreement with SAFE China. Further, this also includes a deposit of USD 500 million received from SAFE in June 2008 carrying interest at six months LIBOR plus 100 bps payable semi-annually. The outstanding balance of this deposit is USD 100 million as on June 30, 2013 (2012: USD 200 million). This deposit is the direct liability of the [SDP].'

📚 Sources & References

• China to roll over $500 million loan to Pakistan’s central bank for its foreign currency reserves
• HE STATE OF PAKISTAN’S ECONOMY - Third Quarterly Report for the year 2017-18
• State Bank of Pakistan
• Revision Study on External Debt Statistics, 03 September 2012
• SBP Annual Report-Statistical Supplement FY 15
• Annual Report Performance Review 2012-2013
• INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS
• Pakistan’s Debt and Liabilities-Summary
• China to roll over $500 mn loan to State Bank of Pakistan for one more year, 8.1 Pakistan’s Debt and Liabilities-Summary
• Internal External Public Debt 2018, 5.1 Pakistan's Debt and Liabilities-Summary, 5.1 Pakistan's Debt and Liabilities-Summary, 8.1 Pakistan’s Debt and Liabilities-Summary
• YEAR BOOK 2011-12
• DRS Official Commitments from China Through 2021
• Foreign Economic Assistance
• IDS_Average interest on new external debt commitments
• IDS_Average_grace_period_and_maturity_on_new_external_debt_commitments 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.