Pakistan signs an Islamic financing deal worth $ 4.5 billion to remove the debts of the power sector

Pakistan entered into informed papers with 18 commercial banks for an Islamic financing facility up to PKR1.275tn Reuters.

Funding will treat unpaid bills and benefits that led to the strongly restricting the industry and an impact on economic stability.

The banks participating in the financing facility are Mizan Bank, HBL, the National Bank of Pakistan and UBL.

The government, which carries ownership or control over a large part of the country’s energy infrastructure, is facing a liquidity crisis of supply chains, intensive investment opportunities and intense financial burdens.

This issue is still a major concern under the Pakistani International Monetary Fund program (IMF).

The efforts made to bridge the financial void have faced challenges due to the limited budget deadline and the old high -cost debt, which complicates decision -making.

The newly organized facility benefits from a three -month -old concession rate – normative banks are used for price loans – minus 0.9 %. These conditions were approved by the International Monetary Fund.

Current obligations have higher costs, including additional fees for the late payments imposed on independent energy producers at rates of KIBor in addition to 4.5 %, along with old loans that exceed the reference prices marginally.

To pay the loan, the government plans to allocate PKR323 billion annually towards extinguishing loans, while maintaining the PKR1.938tn roof over six years.

“It will be paid on 24 quarterly installments over six years and will not add to the public debts,” said the Minister of Authority, Owais Legari.

The financing agreement is in line with Pakistan’s broader goal for the gradual disposal of interest -based banking services by 2028, as Islamic financing is currently about a quarter of the country’s bank assets.

In December 2024, adb He agreed to a $ 200 million loan To upgrade the energy distribution infrastructure in Pakistan.

The initiative seeks to improve the efficiency of distribution companies and ensure reliable electricity supply.

“Pakistan signs an Islamic financing deal worth $ 4.5 billion to remove the debts of the power sector” that was originally established and published Energy technologyThe brand owned by Globaldata.

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