What is US EXIM bank and why is Pakistan turning to it now?

Pakistan’s recent talks with the US Export-Import Bank (EXIM) are opening a new channel for financing major projects — from Pakistan International Airlines’ planned Boeing purchases to refinery upgrades and the Reko Diq mining project.

But what exactly is US EXIM Bank, why is Pakistan suddenly talking to it, and how does it fit into the wider economic relationship between Islamabad and Washington?

What is US EXIM Bank?

The US Export-Import Bank is the official export credit agency of the United States. Its job is to support American exports by providing financing, loan guarantees and insurance when private-sector lenders cannot or will not provide sufficient financing.

In simple terms, EXIM helps foreign buyers finance purchases of US goods, equipment and services, making it easier for American companies to compete for international business.

That is why Boeing aircraft are relevant. If PIA wants to purchase Boeing aircraft, EXIM can potentially provide financing for the transaction because the aircraft are US exports. The financing can be structured against the aircraft itself, with the bank assessing the creditworthiness of the airline or lessee.

US EXIM should not be confused with Pakistan’s own EXIM Bank. They are separate institutions in different countries. Pakistan’s EXIM Bank was established to support and promote Pakistani exports, while US EXIM’s mandate is to support US exports and American jobs.

So why is Pakistan talking to it now?

The discussions are part of a broader push to deepen Pakistan-US economic ties and bring more US financing, technology and investment into major Pakistani projects.

In July, Deputy Prime Minister Ishaq Dar said Pakistan was aiming to double bilateral trade with the US to $20 billion over five years (as compared to the $9.4 billion reached during the last fiscal year), describing the US as Pakistan’s largest single-country export market. He also called for greater US investment in areas including technology, minerals and energy.

The EXIM talks are therefore not simply about getting another loan. They are part of an effort to connect trade, investment, US suppliers and project financing more closely.

This comes alongside Pakistan’s separate request for a $10 billion Exchange Stabilisation Support Facility from the US Treasury. Finance Minister Muhammad Aurangzeb has said that this is not a conventional loan or credit line, but is intended to strengthen foreign-exchange stability and help Pakistan move towards market-based financing. Nothing had been finalised at the time of his comments.

What is happening with PIA?

Pakistan has sought US EXIM financing for PIA’s planned aircraft purchases, particularly Boeing 787 Dreamliners, along with financing for aircraft and engines.

Aurangzeb has also raised the need for spare parts to bring grounded Boeing 777s back into service.

The two sides agreed to continue work on a broader cooperation framework while prioritising specific transactions, including possible financing for aircraft pre-delivery payments.

Importantly, the government says it is not buying the aircraft itself. Finance Ministry adviser Khurram Schehzad said no sovereign guarantee or taxpayer-funded government loan had been announced. EXIM could potentially finance the aircraft and assess PIA or its lessee, meaning a sovereign guarantee would not automatically be required.

What about refineries?

Refinery modernisation is another area where Pakistan is seeking potential US EXIM support.

The discussions cover refinery upgrades, but unlike Reko Diq, this remains an area where financing opportunities are being explored rather than a completed financing package.

Reko Diq is already further along

The clearest commitment so far is $1.25 billion in US EXIM financing for the Reko Diq project.

Pakistan has welcomed the financing, while Finance Minister Aurangzeb has highlighted the mining project’s importance to Pakistan’s future exports and the cost of delays.

What has actually been decided?

Approved: $1.25 billion in US EXIM financing for Reko Diq.

Being explored: Financing for PIA’s Boeing aircraft and engines, possible pre-delivery payments, Boeing 777 spare parts and refinery upgrades.

Broader plan: Pakistan and US EXIM are working towards a wider cooperation framework that could create a pipeline of projects eligible for US financing.

So this is not one new US loan to Pakistan. It is the development of a financing channel that can connect Pakistani projects with American companies, equipment, technology and capital — while fitting into Islamabad’s broader push to expand trade and economic ties with Washington.