China rolls over another $2.1billion loan for Pakistan for two years

ISLAMABAD  –  China has agreed to rollover Paki­stan’s loan worth $2.1 billion, due for payment within next two years, it is learnt reliably here.

The Economic Coordination Com­mittee (ECC) of the Cabinet has ap­proved that the revised term of grace period of all 31 loan agree­ments (guaranteed+ central), con­tracted with China EXIM Bank, are extended with 2 years from 21st July, 2023 to 30th June 2025, official source told The Nation.

An option of re-arrangement of scheduled payments of 32 loans (Guaranteed + Central), amounting to approximately $ 2.4 billion (prin­cipal amount), due between the pe­riod July 2023 and June 2025, was taken up with the EXIM Bank, the source said. The proposal contained extension of the maturity period tenure of each loan, contracted with EXIM Bank, China, by two years as grace period. During the grace peri­od, interest payment would be made to the EXIM Bank China; where­as, repayment of principal amount would be deferred for two years.

The bank, with some minor amend­ments, expressed its willingness to agree to the proposal, and suggest­ed that the government of Pakistan may take up the re-arrangement of 31 loans (excluding one syndicate loan) formally, with the government of People’s Republic of China.

Meanwhile a formal request was submitted to the Chinese govern­ment. After formal request, the re-ar­rangement proposal was negotiated with the concerned authorities of the Chinese government and EXIM Bank. Formal approval of the government of China had been conveyed to EAD by the EXIM Bank through its let­ter dated 17th July 2023, the source maintained. Economic Affairs Divi­sion had submitted a summary to ECC for the approval of the re-ar­rangement proposal.