Pakistan signs $1.2bn Saudi oil facility on deferred payment

Pakistan has signed an agreement with the Saudi Fund for Development (SFD), which will allow the country to import Saudi oil on deferred payment for one year totalling $1.2 billion, a statement from the Prime Minister’s Office (PMO) said on Monday.

A delegation, led by SFD CEO Sultan Bin Abdul Rehman Al Marshad, called on Prime Minister Shehbaz Sharif in Islamabad.

PM Shehbaz witnessed signing of the Oil Import Financing Facility as well as loan agreement for the Gravity Flow Water Supply Scheme at Mansehra, Khyber Pakhtunknwa, according to PMO.

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Secretary Economic Affairs Division Dr Kazim Niaz and CEO SDF H.E. Sultan Bin Abdul Rehman Al Marshad signed the agreements on behalf of their respective governments.

“The prime minister welcomed the signing of Oil Import Financing Facility according to which Pakistan will receive oil on deferred payment for one year totalling $1.20 billion,” PMO statement read.

The deal is expected to help strengthen Pakistan’s economic resilience by securing a stable supply of petroleum products while reducing immediate fiscal burdens.

Meanwhile, the SFD will provide an amount of $41 million for Gravity Flow Water Supply Scheme at Mansehra, Khyber Pakhtunkhwa, which will help enhance access to clean drinking water for 150,000 local people of Mansehra, improving overall public health and quality of life, the PMO said.

On the occasion, PM Shehbaz hailed the SFD for providing financing to Pakistan in the fields of health, energy, infrastructure, and education. He also appreciated the Fund’s efforts for helping reconstruction in Pakistan areas hit by 2022 devastating floods.

The SFD CEO shared updates with PM Shehbaz about ongoing projects including Mohmand Multi-purpose Hydropower Project, Golan Gol Hydropower Project, Malakand Regional Development Project, and other projects funded through Saudi grants, the PMO stated.

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PM Shehbaz highlighted the need to expedite the processing of new projects, shared with the SFD, in the field of green energy and infrastructure, which once implemented would “go a long way in the economic revival of the country, besides serving the needs of the local communities”.

The SFD CEO assured early processing of the shared projects and also reiterated that the Kingdom of Saudi Arabia would extend all possible assistance and continued support to Pakistan, the PMO said.

FM Muhammad Aurangzeb meets SFD CEO

During the day, the SFD CEO also met Pakistan Finance Minister Muhammad Aurangzeb and discussed various aspects of Pakistan-Saudi economic relations, according to a statement from the Finance Division.

Aurangzeb shared updates on Pakistan’s macroeconomic stability, highlighting improvements in key economic indicators. He emphasised the importance of Saudi Arabia’s continued support in funding and investment, which has significantly contributed to Pakistan’s economic growth, the statement added.

Aurangzeb also recalled his recent meeting with Saudi Minister of Finance, Mohammed bin Abdullah Al-Jadaan, in Davos, and his extending an invitation to Pakistan to attend the first edition of the high-level annual conference on challenges and opportunities facing emerging market economies, which is being jointly organised by the International Monetary Fund (IMF) and the Kingdom of Saudi Arabia in Al-Ula, Saudi Arabia, on February 16-17, 2025.

FM Aurangzeb expressed his anticipation for the conference, noting the valuable insights he hoped to gain from the event and the leadership of Saudi Arabia in implementing Vision 2030.

“H.E. Sultan Abdulrahman A. Al Marshad lauded the progress Pakistan has made in terms of macroeconomic stability and growth, which has opened up numerous multi-purpose investment opportunities across various sectors,” the Finance Division said.

He particularly noted the potential for further collaboration between Pakistan and Saudi Arabia, inviting investors from the Kingdom to explore these emerging opportunities, the statement added.

Additionally, H.E. Al Marshad acknowledged the valuable contributions of Pakistanis in the development of Saudi Arabia, recognising them as the largest foreign workforce in the Kingdom.

He expressed Saudi Arabia’s need for a skilled workforce to meet the demands of its growing market.

“To address this, he [SFD CEO] proposed a partnership with relevant government ministries and departments in Pakistan to offer training programs for young Pakistanis in modern and relevant skill sets to meet the labor market demands in Saudi Arabia.”

The meeting underscored the strong ties between Pakistan and Saudi Arabia and set the stage for further economic collaboration, with a focus on investment, workforce development, and expanding bilateral cooperation, the Finance Division said.