Overview

ICBC provides $300 million loan to shore up Pakistan’s foreign exchange reserves (Linked to Record ID#57695)

Commitments (Constant USD, 2023)$311,396,247

Commitment Year•2019Country of Activity•PakistanDirect Recipient Country of Incorporation•PakistanSector•General Budget SupportFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date: Mar 25, 2019

First repayment (originally scheduled): Mar 24, 2021

Last repayment (originally scheduled): Mar 24, 2021

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 Commercial Banks

Industrial and Commercial Bank of China (ICBC)

Receiving agencies

Government Agencies

State Bank of Pakistan (SBP)

Implementing agencies

Government Agencies

State Bank of Pakistan (SBP)

Loan description

ICBC provides $300 million loan to shore up Pakistan’s foreign exchange reserves

Grace period•2 yearsGrant element•7.7139%Interest rate (t₀)•5.423%Interest type•Variable Interest RateLoan tenor•6-month rateMaturity•2 years

Narrative

Full Description

Project narrative

On March 25, 2019, the Industrial and Commercial Bank of China (ICBC) and the State Bank of Pakistan signed a $300 million facility (loan) agreement to shore up the country’s foreign exchange reserves. The loan carried the following terms: a 2-year maturity (final maturity date: March 27, 2021), a 2-year grace period, and an interest rate of 6-month LIBOR plus a 2.75% margin. The ICBC loan, which is captured via Record ID#57696, fully disbursed and was issued alongside an RMB 15 billion ($2.24 billion) loan from China Development Bank to the State Bank of Pakistan for the same purpose (captured via Record ID#57695).

Staff comments

1. The Economic Affairs Division (EAD) within Pakistan’s Ministry of Finance identifies the purpose of the loan as balance of payments (BOP) support. 2. The loan's all-in interest rate was calculated by adding 2.5% to average 6-month LIBOR in March 2019 (2.318%). 3. The loan's grace period (2 years) was voluntarily disclosed by the Government of Pakistan to the World Bank through the Debtor Reporting System (DRS). See https://www.dropbox.com/scl/fi/lqz34vowelgczylbmjlz0/Private-Chinese-Loans-to-Pakistan-November-2023-DRS-Extraction.xlsx?rlkey=jlclkt896s9otfcgx5eywl5cc&dl=0