ISLAMABAD: In a significant move to bolster economic relations amid Pakistan’s economic challenges, Pakistan and Saudi Arabia on Monday inked two agreements totaling $1.61 billion.
The ceremony was attended by Prime Minister Shehbaz Sharif alongside Sultan Abdulrahman Al-Marshad, the chief executive officer of the Saudi Fund for Development (SFD).
These agreements include a deferred payment arrangement for oil imports from Saudi Arabia, valued at $1.20 billion for a year and a concessional loan of $41 million aimed at developing a gravity-flow water supply scheme in Mansehra.
The agreements were signed by DrKazimNiaz, secretary of the Economic Affairs Division, and Sultan bin Abdul Rehman Al-Marshad, representing their respective governments. Prime Minister Sharif welcomed the signing of the Oil Import Financing Facility, according to which, Pakistan will import oil on deferred payment for a year, amounting to $1.20 billion.
This initiative is expected to enhance Pakistan’s economic stability by ensuring a consistent supply of petroleum products while alleviating immediate financial pressures.
Additionally, the SFD will provide $41 million for the Gravity Flow Water Supply Scheme in Mansehra, Khyber Pakhtunkhwa, which will provide clean drinking water to 150,000 residents and is projected to meet the needs of 201,249 people by 2040, thereby, improving public health and living standards.
Earlier, the SFD delegation led by its CEO Sultan bin Abdul Rehman Al-Marshad met with Prime Minister Shehbaz Sharif.
Sharif welcomed the delegation, highlighting the enduring friendship between Saudi Arabia and Pakistan and commended the SFD’s contributions to various sectors, including health, energy, infrastructure and education as well as its support for reconstruction efforts after 2022 floods.
Al-Marshad also expressed his gratitude for the warm reception and hospitality. Marshad shared the updates with the prime minister about several ongoing projects including the Mohmand multi-purpose hydropower project, Golan Gol hydropower project, Malakand regional development project and various other projects funded through Saudi grants.
The prime minister expressed his gratitude for the SFD’s support and emphasised the need for accelerating the processing of new projects related to green energy and infrastructure.
He noted that these projects, once implemented, would significantly contribute to the Pakistan’s economic revival while also addressing the needs of the local communities.
Marshad assured to expedite the processing of the shared projects and reaffirmed that Saudi Arabia, under the guidance of its Royal Family, would provide unwavering support and assistance to Pakistan.
Sharif extended his gratitude to Marshad and the delegation members, and conveyed his warm regards to the Royal family, particularly to Khadim-e-Harmain Sharifain King Salman bin Abdulaziz Al-Saud and Crown Prince and Prime Minister Mohammed bin Salman.
Reuters adds: Pakistan on Monday signed an agreement with the Saudi Fund for Development to defer by one year a $1.2 billion payment on the country’s oil imports, the country’s prime minister office said.
Pakistan’s state-run television showed the signing ceremony live ahead of a delegation of the fund led by its CEO Sultan Bin Abdul Rehman Al Marshad called on Prime Minister Shehbaz Sharif.
Sharif welcomed the signing of the oil import financing facility, the office said in a statement. Pakistan will receive the oil on deferred payment for one year, it said.
“This project will strengthen Pakistan’s economic resilience by securing a stable supply of petroleum products while reducing immediate fiscal burdens,” the prime minister office said.
It said the fund will provide an amount of $41 million for a water supply scheme to help access to clean drinking water for 150,000 local people of a district I northwest Pakistan. Petroleum products mostly from Saudi Arabia make the major chuck of Pakistan’s import bill. The Saudi facility to defer the payment can help Islamabad boost its foreign reserves ahead of the first review of a $7 billion IMF bailout in March.
Copyright Business Recorder, 2025
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