Active Development AidData Chinese Aid

China’s SAFE provides $2 billion deposit loan to shore up Pakistan’s foreign exchange reserves in March 2023 (Linked to Record ID#92087, 73343, 97848, 97851, 97852, 97849)

$2M USD

Funder	China State Administration of Foreign Exchange (SAFE)
Recipient Organization	Government of Pakistan
Country	Pakistan
Start Date	Mar 23, 2023
End Date	Nov 22, 2026
Duration	1,340 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`97852`

Grant Description

China’s SAFE provides $2 billion deposit loan to shore up Pakistan’s foreign exchange reserves in March 2023 On March 23, 2018, the People's Bank of China signed an agreement with the State Bank of Pakistan to provide a $2 billion loan — via China’s State Administration of Foreign Exchange (SAFE) — to shore up the country’s foreign exchange reserves (as captured via Record ID#73343).

📋 Loan / Grant Terms

💰 Loan Amountcarried the following borrowing terms: a 1-year maturity

📅 Maturity1 year

⏳ Grace Period1 year

The loan fully disbursed.

Then, on March 23, 2019, the $2 billion SAFE deposit loan from 2018 was repaid and reissued (i.e. 'rolled over') with a maturity date of March 23, 2020 (as captured via Record ID#92087).

One year later, on March 23, 2020, the $2 billion SAFE deposit loan from 2019 was repaid and reissued (i.e. 'rolled over') with a maturity date of March 23, 2021 (as captured via Record ID#97848).

Then, on March 23, 2021, the $2 billion SAFE deposit loan from 2020 was repaid and reissued (i.e. 'rolled over) with a maturity date of March 23, 2022 (as captured via Record ID#97849).

Then, on March 23, 2022, the $2 billion SAFE deposit loan from 2021 was repaid and reissued (i.e. 'rolled over') with a maturity date of March 23, 2023.

📋 Loan / Grant Terms

💰 Loan Amountfrom 2022 was repaid and reissued (i

In January 2024, Pakistan's Caretaker Prime Minister Anwaarul Haq Kakar sent a letter to Chinese Premier Li Qiang, requesting the the $2 billion SAFE deposit loan be 'rolled over' on March 23, 2023 for another year.

After initially requesting that the borrower pay a higher interest rate, SAFE reportedly agreed to reissue (i.e. 'roll over') the $2 billion deposit loan for an additional year at the same interest rate (6-month SOFR plus a 1.715% margin) in late February 2024 (as captured via Record ID#102316).

📋 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.
Until 2018, all SAFE loans were managed by the State Bank of Pakistan (SBP). However, during the 2018-2019 fiscal year, the loans were reclassified and are now under the aegis of the Economic Affairs Division (EAD).
June 30, 2023 marked the cessation of the USD LIBOR panel. SOFR then became the dominant interest rate benchmark for USD-denominated borrowings.
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

📚 Sources & References

P A K I S T A N F E D E R A L PUBLIC EXPENDITURE REVIEW 2023
PAKISTAN REQUEST FOR PURCHASE UNDER THE RAPID FINANCING INSTRUMENT—PRESS RELEASE; STAFF REPORT; AND STATEMENT BY THE EXECUTIVE DIRECTOR FOR PAKISTAN
China assures Pakistan of continued support
Dar confirms rollover of $2bn China loan, says issue is ‘no longer pending’
Govt requests $2b loan rollover
Govt gets financial relief as China rolls over $4.2b debt
Ishaq Dar confirms rollover of 2 billion Chinese loan
Ishaq Dar confirms rollover of $2 billion Chinese loan
China has rolled over $2bn loan
Dar tells Senate
DRS Official Commitments from China Through 2021
IDS_Average_grace_period_and_maturity_on_new_external_debt_commitments
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
China agrees to rollover $2b debt on existing terms
Pakistan ‘seeks’ rollover of $2bln loan from China 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

Government of Pakistan

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