UAE extends $3 bn loan to Pakistan
23 Jan 2019
The United Arab Emirates (UAE) has extended a $3 billion bailout package for cash-strapped Pakistan, as part of Abu Dhabi's support to shore up dollar reserves and avert a debt payment crisis.
State Bank of Pakistan (SBP) chief Tariq Bajwa and Abu Dhabi Fund for Development (ADFD) director general Mohammed Saif Al Suwaidi signed the aid package on Tuesday.
The UAE had, in December last year, announced a $ 3 billion financial assistance package to Pakistan after Saudi Arabia made a similar commitment to help Islamabad successfully overcome international payment crisis and to avoid a stringent International Monetary Fund (IMF) deal.
"UAE has formalised US $3bn deposit in the State Bank of Pakistan. DG ADFD & the Governor SBP inked the agreement at #ADFD Headquarters in Abu Dhabi," Foreign Office spokesman Mohammad Faisal tweeted.
He said the agreement will help Pakistan achieve financial stability and overcome economic challenges. He also noted ADFD's support over the years to stimulate Pakistan's economic growth and sustainable development.
Speaking on the occasion, Suwaidi said, "The directive to deposit $3 billion with the State Bank of Pakistan aligns with the UAE leadership's keenness to bolster Pakistan's economy, help its government achieve financial stability and overcome economic challenges, and drive comprehensive development in the country."
He added, "ADFD and the Government of Pakistan have enjoyed strong and long-standing ties dating back to 1981. The Fund's efforts have significantly contributed to improving socio-economic conditions in the country, boosting strategic growth and achieving the development priorities of the Pakistani government.
To date, ADFD has provided AED1.5 billion to fund sustainable development projects in Pakistan spanning diverse sectors, including transport, water and agriculture, healthcare, and education, according to a press release.
The UAE had committed the financial assistance during Prime Minister Imran Khan's visit to Qatar last month to seek investment and provision of LNG on deferred payments.
Pakistan has a 15-year contract with Qatar for supply of LNG.
The Saudi and the UAE governments have played a major role in helping Pakistan to meet around $12 billion shortfall in balance of payments in 2018-19 fiscal year, government officials said.