Federal cabinet approves $2.4 billion loan from China

– China to provide loan with record 1% margin

ISLAMABAD: The Federal Cabinet has granted its necessary approval to secure a loan facility worth two billion forty crore dollars from China at a one percent margin for the next three-year period.

According to sources, the federal cabinet has granted its important approval through the circulation of a summary to obtain the loan facility with a margin of 1% from China for a period of three years under an agreement signed by the government. graduating from the PTI in 2019.

“[The] The Cabinet has approved the summary of the Ministry of Finance to obtain a loan worth two billion forty crores from China,” the sources said.

They added that the Prime Minister approved the placement of the summary before the cabinet by circulation under Rule 17(1)(b) of the Rules of Procedure 1973 given the urgency of alleviating current pressures on the exchange rate.

According to an available document titled RMB 15 Billion Syndicated Loan Facility of China Development Bank, Industrial and Commercial Bank of China and Bank of China, China Development Bank as Agent Bank of the Facility of syndicated loan from the consortium of Chinese banks, i.e. Development Bank of China, Industrial and Commercial Bank of China and Bank of China granted a facility extension of 15 billion RMB (2,400.00 million dollars) for a period of three years at a SHIBOR of six months + margin of 1.50%.

This facility was extended in March 2019 and matured on March 24, 2022. The Chinese side reduced the margin by 1% compared to the previous facility. The draft facility agreement shared by China Development Bank has been forwarded to the Ministry of Law and Justice and the Attorney General’s Office of Pakistan for verification and clearance in light of cabinet decisions dated May 14, 2019.

According to the document, the Ministry of Law and Justice has authorized the draft agreement subject to the fulfillment of all codal formalities. The immunity waiver clauses in the draft facility agreement are the same as those in the facility agreement signed on March 19, 2019.

“Approval of the Cabinet is sought for the Draft Facility Agreement under Rule 16(1)(d) of the 1973 Regulations as well as taking into account the submissions of the Office of the Attorney General of Pakistan,” the document adds. . .

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