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Overview

CDB provides $1 billion loan to shore up Pakistan’s foreign exchange reserves in FY 2019-2020 (Linked to Record ID#90968)

Commitments (Constant USD, 2023)$1,037,987,491
Commitment Year•2019Country 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
Jul 1, 2019
First repayment
Jun 30, 2022
Last repayment
Jun 30, 2022

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 desecription

CDB provides $1 billion loan to shore up Pakistan’s foreign exchange reserves in FY 2019-2020

Grace period•3 yearsGrant element•11.5742%Interest rate (t₀)•5.2185%Interest type•Variable Interest RateLoan tenor•6-month rateMaturity•3 years

Narrative

Full Description

Project narrative

In Fiscal Year 2019-2020, China Development Bank provided a total of $1.7 billion worth of loans to the State Bank of Pakistan to shore up the country’s foreign exchange reserves. The loans carried the following borrowing terms: a 3-year maturity, a 3-year grace period, and an interest rate of 6-month LIBOR plus a 3% margin. It is unclear whether CDB issued two separate loans (a $1 billion loan and a $700 million loan) or a single $1.7 billion loan in two separate tranches. For the time being, the $700 million contribution is captured via Record ID#90968 while the $1 billion contribution is captured via Record ID#92272.

Staff comments

1. The all-in interest rate was calculated by adding 3% to the average, 6-month LIBOR rate in 2019 (2.318%). 2. The precise loan commitment date is unknown. This issue requires further investigation. For the time being, AidData assumed that the loan contracted in Fiscal Year 2019-2020 was contracted in calendar year 2019, and the commitment date is coded as July 1, 2019. 3. One official source (https://www.dropbox.com/s/3lnbfhvvdkbn67i/1579233392_551.pdf?dl=0) indicates that CDB issued a $700 million balance of payments (BOP) support loan in December 2019 (with an interest rate of 3-month LIBOR plus 3.23% margin and a 3 year maturity). However, another official source (https://www.dropbox.com/s/dj9qtmjm24bhakc/Supplement_2019_20.pdf?dl=0) indicates that CDB issued one or more loans worth $1.7 billion in Fiscal Year 2019-2020 (with an interest rate of 6-month LIBOR plus a 3% margin and a 3 year maturity). This discrepancy may reflect the fact that CDB issued two separate loans (a $1 billion loan and a $700 million loan) or that CDB issued a single $1.7 billion loan in two separate tranches. For the time being, AidData captures the $1.7 billion loan commitment in two separate records. However, this issue warrants further investigation.