Pakistan has secured a significant agreement with the Saudi Fund for Development (SFD) that will allow the country to import oil from Saudi Arabia on a deferred payment plan for one year, amounting to $1.2 billion. This deal, aimed at enhancing Pakistan’s economic stability, was officially announced following a meeting between Prime Minister Shehbaz Sharif and SFD CEO Sultan Bin Abdul Rehman Al Marshad in Islamabad.
The signing of the Oil Import Financing Facility, along with a loan agreement for the Gravity Flow Water Supply Scheme in Mansehra, Khyber Pakhtunkhwa, was witnessed by Prime Minister Shehbaz Sharif. The agreements were signed by Secretary of the Economic Affairs Division, Dr. Kazim Niaz, and SFD CEO Sultan Bin Abdul Rehman Al Marshad on behalf of their respective governments.
Under this new agreement, Pakistan will be able to import petroleum products from Saudi Arabia, totalling $1.2 billion, with the payment deferred over the next year. This deal is expected to provide Pakistan with a stable supply of oil while easing the country’s immediate fiscal pressures. By securing affordable and reliable access to oil, the deal will play a crucial role in strengthening Pakistan’s economic resilience.
In addition to the oil import deal, the Saudi Fund for Development (SFD) has committed $41 million to the Gravity Flow Water Supply Scheme in Mansehra, Khyber Pakhtunkhwa. This initiative will improve access to clean drinking water for around 150,000 residents of the area, enhancing public health and the overall quality of life for the local population.
Prime Minister Shehbaz Sharif expressed appreciation for the SFD’s support in Pakistan’s infrastructure, health, education, and energy sectors. He also highlighted the Fund’s role in the recovery and reconstruction of areas impacted by the devastating 2022 floods in Pakistan.
During the meeting, SFD CEO Sultan Bin Abdul Rehman Al Marshad updated Prime Minister Shehbaz Sharif on several ongoing projects funded by Saudi Arabia, including the Mohmand Multi-purpose Hydropower Project, Golan Gol Hydropower Project, and the Malakand Regional Development Project. These initiatives reflect the deepening economic cooperation between the two nations.
Prime Minister Shehbaz Sharif emphasized the need to expedite the processing of new projects, particularly in the areas of green energy and infrastructure, which would significantly contribute to Pakistan’s economic revival and address local community needs. In response, the SFD CEO assured that the Kingdom of Saudi Arabia would continue to support and assist Pakistan in the development of these projects.
The day also saw a meeting between Sultan Bin Abdul Rehman Al Marshad and Pakistan’s Finance Minister Muhammad Aurangzeb, where both sides discussed the evolving economic relationship between Pakistan and Saudi Arabia. Minister Aurangzeb shared positive updates on Pakistan’s macroeconomic indicators, noting improvements in key economic areas. He emphasized the importance of continued Saudi support in financing and investment, which has been pivotal to Pakistan’s economic progress.
The discussion also touched on the upcoming high-level conference in Saudi Arabia, which Pakistan has been invited to attend. The conference, jointly organized by the International Monetary Fund (IMF) and Saudi Arabia, will focus on challenges and opportunities facing emerging market economies and is set to take place in Al-Ula, Saudi Arabia, on February 16-17, 2025.
One key topic of conversation during the meeting was the potential for enhancing workforce development. Sultan Bin Abdul Rehman Al Marshad acknowledged the significant contributions of Pakistan’s expatriate community in Saudi Arabia, recognizing them as the Kingdom’s largest foreign workforce. He proposed a partnership between Pakistani government ministries and the SFD to create training programs for young Pakistanis in relevant skills to meet the demands of the growing labor market in Saudi Arabia.
The meetings and agreements reflect the ongoing commitment between Pakistan and Saudi Arabia to deepen bilateral ties and foster mutual growth. The oil import deal, along with other collaborative projects, highlights the importance of Saudi support in Pakistan’s development. Moving forward, both countries are set to explore further opportunities in investment, workforce development, and infrastructure projects, reinforcing the strategic partnership between the two nations.
