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CDB provides $1 billion loan to shore up Pakistan’s foreign exchange reserves in June 2021 (Linked to Record ID#97840)
| Funder | China Development Bank (CDB) |
|---|---|
| Recipient Organization | State Bank of Pakistan (SBP) |
| Country | Pakistan |
| Start Date | Jun 28, 2021 |
| End Date | Dec 04, 2033 |
| Duration | 4,542 days |
| Number of Grantees | 1 |
| Roles | Recipient |
| Data Source | AidData Chinese Aid |
| Grant ID | 92618 |
Grant Description
CDB provides $1 billion loan to shore up Pakistan’s foreign exchange reserves in June 2021 On June 28, 2021, China Development Bank (CDB) signed a $1 billion term facility (loan) agreement with the State Bank of Pakistan to shore up the country’s foreign exchange reserves (captured via Record ID#92618).
The loan agreement was later presented to Pakistan's Cabinet on December 8, 2021 and approved on December 21, 2021.
However, on April 28, 2023, CDB and the State Bank of Pakistan signed an amended version of the term facility (loan) agreement that reset the loan's base reference rate from LIBOR to SOFR. The loan fully disbursed and it was repaid ahead of schedule (on or around June 10, 2023).
The lender agreed to waive the prepayment penalty that is typically charged when a borrower decides to repay ahead of schedule.
Then, on June 16, 2023, China Development Bank signed a $1 billion rollover term facility (loan) agreement with the State Bank of Pakistan to shore up the country’s foreign exchange reserves (as captured via Record ID#97840).
Staff Comments
- 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.
- The EAD Project ID number is CDB28062021.
- One official source claims that the loan’s interest rate was 6-month LIBOR plus a 3% margin. Another official source claims that the loan’s interest rate was 12-month LIBOR plus a 3% margin. This issue warrants further investigation.
- One official source indicated that the loan's original maturity was 1-year rather than 2-years, which suggests that a debt rescheduling (maturity extension) may have taken place. This issue warrants further investigation.
Sources & References
- MONTHLY REPORT Foreign Economic Assistance
- Statistical Supplement: Pakistan Economic Survey
- Annual Report 2020-2021 The State of Pakistan's Economy
- Pakistan Economic Survey 22-23
- Ex-post facto approval given: $4bn foreign commercial loans exempted from tax
- China Continues to Rescue Pakistan Amid Uncertain IMF Bailout
- China Keeps Rescuing Pakistan Amid Uncertain IMF Bailout
- China to roll over $300m in three to four days: Dar
- China returns $1 billion loan: SBP
- Pakistan seeks fast-track refinancing of $1.3b loans
- Dar hopes to maintain reserves level at $4b, $500m ICBC loan FD’s date error corrected by Cabinet 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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