Govt Signed $8.276 Billion Worth of Foreign Economic Assistance Agreements in FY2021

The government had signed new agreements worth $8.276 billion with various development partners, SAFE deposits, and foreign commercial banks during the fiscal year 2020-21.

The commitments are to be disbursed within five to six years, as revealed in the Ministry of Economic Affairs ‘Quarterly Report on Foreign Economic Assistance’ that was released on Thursday.


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Out of all the new agreements, $3.988 billion worth of financing agreements were signed with multilateral development partners, $3.110 billion with foreign commercial banks, $1,000 million as a SAFE deposit, and $178 million with bilateral development partners.

Around $3.110 billion worth of agreements that constituted 38 percent of the total new commitments were commercial borrowings. This financing was arranged to refinance the maturing commercial debt, as stated in the report. An amount of $1,000 million (12 percent) has been arranged from the China SAFE authority to repay the deposit to a friendly country.

After commercial banks and SAFE Deposit, the World Bank emerged as the largest development partner in terms of new commitments of the FEA (30 percent) followed by the Asian Development Bank (seven percent), the Islamic Development Bank (six percent), and the Asian Infrastructure Investment Bank (four percent).

During the period, an amount of $4.527 billion was committed as budgetary support, of which $1.417 billion was committed by multilateral development partners as program financing. The remaining amount of $3.110 billion was arranged from foreign commercial banks.


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An amount of $2.269 billion was allocated for project financing. Furthermore, $1,000 million was also arranged from the SAFE authority. The remaining amount of $480 million was arranged for commodity financing purposes.

Disbursements of $7.4 billion during July 2020-March 2021 were mainly under the projects and programs loans/grants from multilateral, bilateral development partners, and financial institutions.

The composition of the disbursement is:

  1.  $2.935 billion or 40 percent of the total disbursements was from the multilateral development partners, mainly the Asian Development Bank, the World Bank, the Islamic Development Bank, and the Asian Infrastructure Investment Bank;
  2. $3.120 billion or 42 percent of the total disbursements was from foreign commercial banks;
  3. $1,000 million or 13 percent of the total disbursement was from the SAFE deposit; and
  4. $358 million or five percent of the disbursements was from the bilateral development partners, particularly China, France, the USA, and the UK.

By 31 March 2021, Pakistan’s total external public debt was $81.2 billion. The composition of Pakistan’s external public debt demonstrates that it is derived from three key sources. The major source is multilateral debt (comprising 50 percent inclusive of the IMF), followed by 26 percent bilateral, and 11 percent foreign commercial banks, while the remaining 13 percent of the debt consists of the SAFE deposit and Bonds (inclusive of Sukuk).


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By 31 March 2021, nearly 70 percent of the total external public debt consisted of loans on fixed interest rates, while 30 percent of the loans were obtained on floating interest rates.

The government had paid an amount of $5.419 billion during July 2020 and March 2021 on account of debt servicing of external public loans. It consisted of a principal payment of $4.374 million and an interest payment of $1.045 billion.

During the period, the majority of the repayments were made against the commercial banks (48 percent), followed by the IDB (15 percent), the ADB (14 percent), the World Bank (12 percent), Bonds (four percent), and China (three percent).

For the period under review, the net transfers to the government debt were $2.850 billion. An amount of USD 1,000 million was arranged from the SAFE authority to repay a deposit received from a friendly country. If this amount is excluded, the net transfers will be $1.850 billion.


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The share of concessional external loans with longer maturity increased by $1,074 million (multilateral and bilateral loans) and the share of commercial borrowing increased by $776 million.

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