Overview

China Development Bank provides $1 billion loan in 2017 to shore up Pakistan’s foreign exchange reserves (Linked to Record ID#50486 and #54159)

Commitments (Constant USD, 2023)$1,064,126,381

Commitment Year•2017Country of Activity•PakistanDirect Recipient Country of Incorporation•PakistanSector•General Budget SupportFlow Type•Loan

Status

Project lifecycle

Pipeline: Commitment

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date: May 15, 2017

First repayment (originally scheduled): May 14, 2020

Last repayment (originally scheduled): May 14, 2020

Geospatial footprint

Map overview

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China Development Bank provides $1 billion loan in 2017 to shore up Pakistan’s foreign exchange reserves. More detailed locational information can be found at: https://www.openstreetmap.org/way/758630714

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Policy Banks

China Development Bank (CDB)

Receiving agencies

Government Agencies

State Bank of Pakistan (SBP)

Loan description

China Development Bank provides $1 billion loan in 2017 to shore up Pakistan’s foreign exchange reserves

Grace period•3 yearsGrant element•13.5506%Interest rate (t₀)•4.44267%Interest type•Variable Interest RateLoan tenor•6-month rateMaturity•3 years

Narrative

Full Description

Project narrative

On May 15, 2017, China Development Bank and the State Bank of Pakistan signed a $1 billion loan (term facility) agreement to shore up Pakistan’s foreign exchange reserves and improve macroeconomic conditions. The loan carried the following borrowing terms: an interest rate of 6-month LIBOR (1.425%) a 3.02% margin, 3-year grace period, and a 3-year maturity.

Staff comments

1. In its 2016-2017 Yearbook, the Economic Affairs Division (EAD) of the Government of Pakistan identified total loan commitments from CDB as $1.7 billion. This aggregate figure refers to the $700 million CDB loan issued in 2016 (captured via Record ID#50483) and the $1 billion CDB loan issued in 2017 (captured via Record ID#54158). 2. Two other facility agreements were signed with Chinese banks in 2017 to help Pakistan with its balance of payments (as captured via Record ID#50486, #54159). 3. The all-in interest rate was calculated by adding 3.02% to the 6-month LIBOR rate in May 2017 (1.425%).