New PIA aircraft: No govt financing, sovereign-guaranteed loans announced: Schehzad

ISLAMABAD: Adviser to the Finance Minister Khurram Schehzad said on Sunday that Pakistan had discussed potential financing from the US Export-Import Bank (US Exim Bank) for Boeing aircraft for privatised Pakistan International Airlines (PIA), but no government loan or sovereign guarantee had been announced for the airline.

In a post on X, Schehzad said Finance Minister Muhammad Aurangzeb’s discussions with the US Exim Bank were not confined to PIA, with potential financing opportunities in several sectors, including aviation, refinery upgrades and the Reko Diq mining project, also discussed as part of broader Pakistan-US economic engagement. He said some commentary about privatisation and the role of an export credit agency appeared to misunderstand the situation.

“The government is neither buying aircraft for a privatised PIA nor has it announced any sovereign guarantee or taxpayer-funded loan for doing so,” Schehzad said.

READ MORE: PIA aircraft, refinery upgrades, Reko Diq: US financing opportunities being explored

He explained that, like export credit agencies elsewhere, the US Exim Bank’s mandate was to support US exports and jobs.

Boeing aircraft, he said, were US exports and the bank provided financing support to foreign purchasers of US-manufactured aircraft, including airlines, through established financing structures.

The US Exim Bank’s framework also provided for asset-backed aircraft financing, under which the aircraft itself could be used as security. Credit could be assessed on the airline or lessee and, where applicable, a guarantor, he said. A sovereign guarantee was therefore not an automatic requirement.

Schehzad said the government’s role was to open doors and facilitate Pakistani businesses’ access to international financing, technology and suppliers, while promoting investment and commercial opportunities.

The government was deliberately reducing the state’s role in commercial activity, pursuing privatisation and creating greater space for private capital, he said.

“Private-sector-led growth does not mean the government is withdrawing from the private sector,” he said. Rather, it meant creating a conducive environment for businesses and facilitating investment instead of running businesses itself. He said privatisation involved the transfer of ownership and commercial management, but did not mean that the government would stop facilitating international opportunities for Pakistani companies.

“The distinction is straightforward: government facilitates, businesses invest and operate, and financing is structured on its own commercial terms,” he said.

Schehzad said claims about a “public loan”, “hidden subsidy”, “state financial backing” or taxpayers assuming PIA’s commercial risk should not be presented as facts when no such arrangement had been announced.

He reiterated that the official statement referred only to potential US Exim Bank financing support and did not announce government borrowing for PIA or a sovereign guarantee.

Any financing, he added, would be arranged according to its commercial terms and financial structure.

Copyright Business Recorder, 2026