Wednesday, May 29, 2024

Pakistan Seeks $3.5 Billion Financing from Saudi Arabia for Diamer-Bhasha Dam

Pakistan has officially asked Saudi Arabia for $3.5 billion to help fund the Diamer-Bhasha Dam project. Saudi officials will discuss this request with their financial advisor before making a decision. Pakistan’s financial advisor will work with a Riyadh advisor to make sure they agree on how to handle the money for the project. It might take about 1.5 to 2 months to get an answer from Saudi Arabia.

During the tough nine months of 2024, Pakistan got $6.9 billion in loans from other countries. The Diamer-Bhasha Dam project is expected to cost $8 billion, and Pakistan wants $4 billion of that to come from other countries.

Pakistan wants $3.5 billion from Saudi Arabia. They’re suggesting $2.3 billion of it be a concessional loan, which means they wouldn’t have to pay back as much interest. The interest rate would be 2.25 percent, and they’d have 25 years to pay it back, with 6 years before they’d have to start paying.

Pakistan also wants $1.2 billion as an equity investment in the project. They’d pay back the money with an interest rate based on how much it costs for the United States government to borrow money for 10 years, which is currently 4.45 percent.

The Diamer-Bhasha Dam project is being funded with 30 percent of the money being an investment and 70 percent being loans. It’s a big deal for Pakistan and is considered the biggest dam project in the country.

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