Karachi: The Pakistani government is exploring various alternatives to raise external financial resources, including Sukuk, Panda bonds and collateral-based financing. In this regard, Finance Minister Muhammad Aurangzeb discussed possible cooperation with a delegation from Sharjah Islamic Bank.
According to the Ministry of Finance, the meeting took place on the sidelines of the annual meetings of the World Bank Group and the IMF in Bangkok. The discussions focused on the possibilities of obtaining long-term loans, improving the repayment schedule of loans and reducing dependence on expensive short-term loans.
In addition to the possible Sukuk issuance, Pakistan also discussed the possibility of financing through more Panda bonds, financial instruments denominated in rupees but settled in dollars, and mega guarantees.
The Finance Minister briefed the delegation on the country’s financial indicators, foreign exchange reserves and progress on the IMF programme. The delegation from Sharjah Islamic Bank expressed its willingness to continue cooperation with Pakistan and participate in a possible Sukuk issuance.
The meeting also discussed investment opportunities related to upgrading refineries, privatising power distribution companies and outsourcing airports.
The key question for the government will be whether new sources of finance can effectively reduce debt servicing pressure. The success of any new issuance will depend on financial conditions, investor demand and the overall economic situation.
