Active Development AidData Chinese Aid

CDB provides $700 million rollover loan to SBP to shore up Pakistan’s foreign exchange reserves in February 2023 (Linked to Record ID#90968)

$700K USD

Funder	China Development Bank (CDB)
Recipient Organization	State Bank of Pakistan (SBP)
Country	Pakistan
Start Date	Feb 24, 2023
End Date	Oct 14, 2032
Duration	3,520 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`96086`

Grant Description

CDB provides $700 million rollover loan to SBP to shore up Pakistan’s foreign exchange reserves in February 2023 In February 2020, China Development Bank (CDB) and the State Bank of Pakistan (SBP) signed a $700 million facility (loan) agreement to shore up Pakistan’s foreign exchange reserves (as captured via Record ID#90968).

📋 Loan / Grant Terms

📅 Maturity3 years

⏳ Grace Period3 years

This loan was repaid at maturity (February 2023).

In February 2023, Pakistan’s Federal Minister for Finance and Revenue, Senator Mohammad Ishaq Dar, announced that the State Bank of Pakistan (SBP) had secured a $700 million (rollover) facility agreement with China Development Bank (CDB) to shore up Pakistan’s foreign exchange reserves (as captured via Record ID#96086).

📋 Loan / Grant Terms

💰 Loan Amountare as follows: a 3-year maturity and an interest rate of overnight SOFR plus a 2% margin

📅 Maturity3 years

The loan disbursed in full on February 24, 2023.

Under a staff-level agreement with the IMF that was slated for signature on February 28, 2023, the SBP was required to build its foreign exchange reserves to a minimum of $10 billion to cover the country’s import bill for two months.

📋 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.
According to an April 4, 2023 report from the National Assembly of Pakistan, ‘[a]ll of Chinese commercial bank maturities during FY23 will be rolled over. Chinese authorities have assured the rollover of SAFE deposits, refinancing of bank loans and increase in the SWAP line from RMB 30 billion to RMB 40 billion. Government has recently received US$ 700 mn from CDB and further inflows are in pipeline from ICBC.’ See https://na.gov.pk/uploads/documents/questions/642d26d720755_869.pdf 3. June 30, 2023 marked the cessation of the USD LIBOR panel. SOFR then became the dominant interest rate benchmark for USD-denominated borrowings.
The Government of Pakistan's loan identification number for the $700 million CDB borrowing in 2023 is CDB18022023. See https://ead.gov.pk/SiteImage/Misc/files/2023/Disbursement%20Report%20March2023.pdf

📚 Sources & References

China lends Pakistan further $700 mln to shore up FX reserves
CDB approves $700 mln for Pakistan: Dar
Formalities completed and Board of China Development Bank has approved the facility of US $ 700 million for Pakistan. This amount is expected to be received this week by State Bank of Pakistan which will shore up its forex reserves!
China okays $700m for Pakistan, says Dar
Pakistan Economic Survey 22-23
China assures Pakistan of continued support
Board of China Development Bank approves facility of $700m for Pakistan: Dar, ‘Pakistan receives $700m from Chinese bank'
SBP receives $700mn from China Development Bank, says Ishaq Dar
China Development Bank approves $700mn facility for Pakistan: Dar
NATIONAL ASSEMBLY SECRETARIAT (6th Group, 51st Session) “QUESTIONS FOR ORAL ANSWERS AND THEIR REPLIES” to be asked at a sitting of the National Assembly to be held on Wednesday, the 5th April, 2023
Disbursement Report March 2023
Disbursement_Report_Feb2023.pdf
Monthly Report Foreign Economic Assistance June,2023
Incoming Funds
Pakistan 'receives' $700 million from China in sigh of relief amid economic meltdown
Pakistan receives $700 from China
NFC award: govt official says IMF has attached no conditions 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.