ISLAMABAD: Pakistan has agreed to a $1 billion loan with Standard Chartered Bank and Dubai Islamic Bank at an interest rate of about 7.6 percent, subject to a $500 million guarantee from the Asian Development Bank (ADB).
The ADB board is set to approve the guarantee on May 28, The Express Tribune reported.
The interest rate for the loan will be floating, set at 3.25 percent above the Secured Overnight Financing Rate (SOFR). Disbursement is expected in the second half of June, after ADB’s approval.
ADB will charge a nominal upfront fee for its guarantee.
In the past, Pakistan had put on hold a $600 million loan offer from Standard Chartered Bank at an interest rate of about 11 percent due to poor market conditions.
The federal government had budgeted $3.8 billion for foreign trade borrowing for the current fiscal year but has so far received only $500 million.
Pakistan’s total external financing plan for the year is $23.4 billion, including $13 billion from China, Saudi Arabia, the United Arab Emirates and Kuwait. $1.3 billion of Chinese commercial debt has already been repaid with an understanding of near-term refinancing.
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