ISLAMABAD:The International Monetary Fund (IMF) distanced itself from Pakistan’s decision to arrange the most expensive foreign commercial loan of $600 million and said that any such move was not linked to its requirement for securing approval for a $7 billion bailout package.
“To our knowledge no commercial financing at 11% has been undertaken and if there is such it does not necessarily for the programme financing assurances,” said a spokeswoman for the IMF in Islamabad.
The IMF statement came days after Finance Minister Muhammad Aurangzeb told the National Assembly Standing Committee on Finance in an in-camera meeting that the government had arranged $600 million in financing at 11% interest for the IMF programme purposes.
The finance minister also told the committee that the government may not draw down the loan. He was responding to a question asked by a legislator.
The Express Tribune reported on September 14 that the government agreed to take a $600 million commercial loan from Standard Chartered Bank to bridge its financing gap, which was necessary before getting a date for the IMF board meeting.
The IMF had identified external financing gap of over $2 billion, prompting Pakistan to seek financing commitments from European and Gulf banks in addition to tapping some extra project financing.
The IMF on Wednesday approved the $7 billion loan package and also authorised the release of first tranche of about $1 billion.
Government sources said that Pakistan had shared details of Standard Chartered Bank’s offer of $600 million loan and its interest cost with the IMF. Pakistani authorities also informed the IMF about other available financing options to bridge the gap.
Officials said that the IMF was not willing to give a date for its board meeting before making sure that there were firm commitments to bridging the $2 billion external financing gap.Standard Chartered Bank gave the firm commitment and shared the term sheet, they added. Subsequently, the Pakistani authorities took the IMF into confidence about the offer and interest rate.
Standard Chartered Bank’s offer was for two loans totaling $600 million. Of these, $300 million was for liquefied natural gas (LNG) supply and another $300 million was syndicate financing.
