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ISLAMABAD: First oil tanker under Saudi oil facility to arrive in the 3rd week of March 2022, said Omar Ayub Khan, Minister for Economic Affairs. Nawaf bin Saeed Al-Malkiy, Ambassador of the Kingdom of Saudi Arabia in Islamabad and Dr Saud Ayid R Alshammari, Director General of Saudi Fund for Development (SFD) called on Omar Ayub Khan, here on Wednesday.

Both sides discussed bilateral economic cooperation including the Saudi oil facility, ongoing development projects, and new initiatives. The minister for Economic Affairs acknowledged the timely operationalisation of Saudi oil facility of $1.2 billion for import of petroleum products on one-year deferred payment basis. Under this facility, the Pak-Arab Refinery Limited (PARCO) and the National Refinery Limited (NRL) will import petroleum products up to $100 million per month from Saudi Arabia.

It was further informed that the first oil tanker was expected to arrive in Pakistan in the 3rd week of March 2022 under the Saudi oil facility. The financing agreement worth $1.2 billion for the import for petroleum products was signed on 29th November 2021 between the SFD and the Economic Affairs Division (EAD), Pakistan. As per the financing agreement, the SFD will extend financing facility up to $100 million per month for one-year for purchase of petroleum products on deferred payment basis.

According to the official documents available with Business Recorder, the terms of the financing includes price of purchase by SFD along with a margin of 3.80 percent per annum. The financing agreement will be initially valid for one year, which may be extended for another one year with mutual consent.

The signing of financing agreement will be followed by submission of sovereign financial guarantee from Pakistan side and opening of new Head of Account. This will be simultaneously followed by signing of purchase contract between importer and Saudi Aramco and Saudi Aramco product trading company.

The Finance Division vide their letter dated 03-01-2022 and 04-01-2022 has furnished the sovereign financial guarantee from Pakistan side as well as Head of Account. The same has been forwarded to Saudi Fund for development and Petroleum Division vide this ministry’s letter dated 05-01-2022. It is expected that it will take one and half month to sign the purchase agreement. After singing the purchase agreement, the financing agreement will be operationalised and importers (Parco and NRL) will materialize the first shipment of crude oil/oil products.

The minister for Economic Affairs appreciated the technical and financial support of SFD for socioeconomic development of Pakistan. The minister further directed to resolve all the bottlenecks and expedite the implementation of development projects on fast track basis.

The minister shared that the EAD is going to implement the triad approach i.e. physical progress verification by satellite through EAD and SUPARCO’s collaboration, financial tracking and use of Gantt Charts for efficient monitoring and smooth implementation of the projects.

The Saudi ambassador assured of continued support at all level for further strengthening the bilateral economic cooperation between the two countries. The Saudi ambassador expressed that the Kingdom of Saudi Arabia is committed to play a much stronger role in the socioeconomic development of Pakistan.

Earlier, the SFD team, headed by Dr Saud Ayid R Alshammari, Director General and GoP team, headed by Zubair Qureshi, Additional Secretary, EAD reviewed the progress on 13 ongoing projects in Pakistan.

At present, the SFD is providing financial assistance for various development projects in the areas of renewable energy, health, education, infrastructure and housing. During the portfolio review, progress of ongoing projects including construction of tunnels on Chella Bandi Raod, AJK, construction of infrastructure in Malakand Region, Golen Gol Hydropower Project, livelihood restoration in Balochistan, construction of Home Economics College, and King Salman bin Abdul Aziz Hospital in Islamabad was discussed.

It was further informed that the SFD will also finance the construction of Mohmand Dam Project, Shounter Hydropower Project, Jagran-IV Hydropower Project (22 MW), Shagarthang Skardu HPP (26MW), Attaabad, Hunza HPP (32.5MW), Gravity Flow Water Scheme Mansehra, and Abbottabad-Muzaffarabad Road Project.

Copyright Business Recorder, 2022

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