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Overview

China’s SAFE provides $500 million deposit loan to shore up Pakistan’s foreign exchange reserves on June 29, 2019

Commitments (Constant USD, 2023)$518,993,745
Commitment Year•2019Country of Activity•PakistanDirect Recipient Country of Incorporation•PakistanSector•General Budget SupportFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jun 29, 2019
Start (actual)
Jun 29, 2019
End (planned)
Jun 29, 2020
End (actual)
Jun 29, 2020
First repayment (originally scheduled)
Jun 28, 2020
Last repayment (originally scheduled)
Jun 28, 2020

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

Government Agencies

  • China State Administration of Foreign Exchange (SAFE)

Receiving agencies

Government Agencies

  • Government of Pakistan

Implementing agencies

Government Agencies

  • Government of Pakistan

Loan description

China’s SAFE provides $500 million deposit loan to shore up Pakistan’s foreign exchange reserves on June 29, 2019

Grace period•1 yearsGrant element•6.1312%Interest rate (t₀)•3.17813%Interest type•Variable Interest RateLoan tenor•12-month rateMaturity•1 years

Narrative

Full Description

Project narrative

On June 29, 2019, China’s State Administration of Foreign Exchange (SAFE) provided a $500 million loan to State Bank of Pakistan in order to shore up the country’s foreign exchange reserves (as captured via Record ID#92088, 97804). The loan carried the following terms: a 1-year maturity (final maturity date: June 29, 2020), a 1-year grace period, and an interest rate of 12-month LIBOR plus a 1% margin. SAFE made a $500 million deposit (loan disbursement) in the State Bank of Pakistan on June 29, 2019. Then, on June 29, 2020, the $500 million SAFE deposit loan from 2019 was repaid and reissued (i.e. 'rolled over') with a maturity date of June 29, 2021. One year later, on June 29, 2021, the $500 million SAFE deposit loan from 2020 was repaid and reissued (i.e. 'rolled over') with a maturity date of June 29, 2022. Then, on June 29, 2022, the $500 million SAFE deposit loan from 2021 was repaid and reissued (i.e. 'rolled over') with a maturity date of June 29, 2023. The Government of Pakistan announced in early June 2023 that it intended to repay and rollover the loan on June 29, 2023. Then, on June 29, 2023, the $500 SAFE deposit loan from 2022 was repaid and reissued (i.e. 'rolled over) with a maturity date of June 29, 2024.

Staff comments

1. The all-in interest rate was calculated by adding 1% to the average, 12-month LIBOR rate in June 2019 (2.277%). 2. Until 2018, all SAFE loans were managed by the State Bank of Pakistan (SBP). However, during the 2018-2019 fiscal year, the loans were reclassified and are now under the aegis of the Economic Affairs Division (EAD)