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

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 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 Project ID#90968 while the $1 billion contribution is captured via Project ID#92272.

Additional details

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.

Number of official sources

6

Number of total sources

6