In a major boost for cash-strapped Pakistan, companies from oil-rich Kuwait are planning to commence several projects in the South Asian country worth $750 million, reported Bloomberg.
As per the report, Kuwait Investment Authority’s Enertech Holding Co. and Pakistan Kuwait Investment Company (PKIC) have partnered up to explore opportunities in Pakistan. They have applied for a digital bank licence and have also proposed building a hydrogen plant and two smart cities, said Mohammad Al Fares, chairman at Pakistan Kuwait Investment Co.
The report added that the two companies are already working on a $200-million water pipeline.
Pakistan, which has seen a massive decline in its foreign exchange reserves in recent months owing to imports and debt payments, has been keen to attract foreign direct investment (FDI), which witnessed a negative growth and declined by 2% during the first nine months of this fiscal year (FY22).
Pakistan fetched FDI amounting to $1.285 billion during July-March of FY22 as against $1.311 billion in the same month of the previous fiscal year (FY21), showing a decline of $26 million.
Meanwhile, the country’s total liquid foreign exchange reserves continued to decline and went below the $17-billion mark. Reserves held by the State Bank of Pakistan also declined to under $11 billion.
In its bid to fetch financing, Islamabad is in negotiations with the International Monetary Fund (IMF) for revival of the $6-billion Extended Fund Facility (EFF) programme. The country has also sought an extension in the programme duration by a year and increase in funding by $2 billion.
If the IMF review is cleared, Pakistan will get more than $900 million, which would also allow the country to seek additional funding from other international creditors.
Meanwhile, Prime Minister Shehbaz Sharif, in his first international trip as the country’s premier, visited Saudi Arabia to discuss extending the terms of a $3 billion loan to help Islamabad’s faltering economy.
The Gulf nation has long been a partner of Pakistan as well as a regular source of financial relief for successive governments.