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Overview

China’s SAFE provides $500 million deposit loan to shore up Pakistan’s foreign exchange reserves in 2008

Commitments (Constant USD, 2023)$704,223,042
Commitment Year•2008Country 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
Jun 1, 2008
First repayment (originally scheduled)
May 31, 2014
Last repayment (originally scheduled)
May 31, 2014

Geospatial footprint

Map overview

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China’s SAFE provides $500 million deposit loan to shore up Pakistan’s foreign exchange reserves in 2008. 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

Government Agencies

  • China State Administration of Foreign Exchange (SAFE)

Receiving agencies

Government Agencies

  • State Bank of Pakistan (SBP)

Implementing agencies

Government Agencies

  • State Bank of Pakistan (SBP)

Loan description

China’s SAFE provides $500 million deposit loan to shore up Pakistan’s foreign exchange reserves in 2008

Grace period•6 yearsGrant element•26.1051%Interest rate (t₀)•3.91063%Interest type•Variable Interest RateLoan tenor•6-month rateMaturity•6 years

Narrative

Full Description

Project narrative

In June 2008, China’s State Administration of Foreign Exchange (SAFE) provided a $500 million deposit loan to State Bank of Pakistan (SBP) in order to shore up the country’s foreign exchange reserves. The loan carried the following terms: a 6-year (estimated) maturity, a 6-year (estimated) grace period, and an interest rate of 6-month LIBOR (3.104% in June 2008) plus a 1% margin. The loan was repayable semi-annually. According to the SBP, the outstanding balance of this loan was $300 million on June 30, 2011, $200 million on June 30, 2012, and $100 million on June 30, 2013.

Staff comments

1. The Fiscal Year 2013 Annual Report of SBP identifies ‘two long-term deposits of USD 500 million each received from the State Administration Foreign Exchange (SAFE) China in January 2009 (rolled-over in January 2013) and June 2012 carrying interest at six months LIBOR plus 100 bps and twelve months LIBOR plus 100 bps respectively, both payable semi-annually. These deposits of USD 500 million each have been set off against the rupee counterpart receivable from the Federal Government and have been covered under Ministry of Finance (MoF) Guarantees dated February 7, 2013 and June 29, 2012 whereby the MoF has agreed to assume all liabilities and risks arising from the Group's agreement with SAFE China. Further, this also includes a deposit of USD 500 million received from SAFE in June 2008 carrying interest at six months LIBOR plus 100 bps payable semi-annually. The outstanding balance of this deposit is USD 100 million as on June 30, 2013 (2012: USD 200 million). This deposit is the direct liability of the [SDP].’ 2. AidData has estimated the final maturity date of the loan to be June 2014 (based on the repayment schedule outlined in Staff Note 1).