Islamabad, Mar 30, 2025: Azerbaijan has extended a financial package of over $1 billion in response to Pakistan’s request for funding the $1.2 billion Sukkur-Hyderabad Motorway project.
This move comes amid internal disagreements among Pakistani government departments regarding the financing structure.
During his recent visit to Azerbaijan, Prime Minister Shehbaz Sharif sought financial assistance for two major infrastructure projects, totaling $1.8 billion.
These include the $1.2 billion Sukkur-Hyderabad Motorway (M-6) and the proposed Hyderabad-Karachi Motorway (M-9), estimated at a minimum of $600 million.
According to National Highway Authority (NHA) officials, Azerbaijan has put forth two financing options.
The first suggests that the State Oil Fund of Azerbaijan deposit a term cash amount with the State Bank of Pakistan, which would then be channeled to the NHA for road construction.
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The second alternative proposes a joint effort between Azerbaijan and the Islamic Development Bank to finance the Sukkur-Hyderabad Motorway directly.
Previously, Azerbaijan had hinted at a $2 billion investment in Pakistan, but Pakistani authorities were unable to present concrete project proposals.
The estimated cost of the Sukkur-Hyderabad Motorway stands at $1.2 billion, and the government has enlisted the American firm AT Kearney to conduct a feasibility study.
Pakistan has invited Azerbaijan to invest in the Hyderabad-Karachi Motorway (M-9), which planners have designed along a new route distinct from the current alignment, besides the Sukkur-Hyderabad project.
The estimated cost of this project, excluding land acquisition, is $600 million, as per NHA sources.
Four countries—China, Saudi Arabia, the UAE, and Kuwait—have already deposited a collective sum of $12.7 billion in Pakistan’s central bank to stabilize the country’s dwindling foreign exchange reserves.
Islamabad continues to pay interest on these deposits, which are annually renewed due to repayment constraints.
The Azerbaijani financing proposal, however, has yet to achieve consensus among Pakistani officials.
Deputy Prime Minister Ishaq Dar recently chaired another high-level meeting on Azerbaijan’s investment proposals.
His office announced that officials must finalize investment plans for infrastructure, energy, trade, and technology sectors by April 3.
The Finance Ministry is reluctant to accept a $1 billion deposit for road construction, preferring that the NHA secure direct financing from Azerbaijan.
A feasibility report by AT Kearney divides the Sukkur-Hyderabad Motorway into five phases, with the Public Private Partnership Authority (P3A) approving the project qualification proposal.
Bidding for the first two phases—Hyderabad-Tando Adam and Tando Adam-Nawabshah—will commence under the PPP model.
The Islamic Development Bank has shown interest in funding these segments, pending an appraisal mission’s visit next month.
Should the M-6 Motorway proceed under the PPP framework, it could be completed in two and a half years.
However, if financed through the Public Sector Development Programme, the project timeline would extend significantly due to fiscal constraints, NHA officials noted.
Meanwhile, the government recently allocated Rs436 billion for a Punjab-focused motorway project while overlooking the Sukkur-Hyderabad Motorway.
Additionally, authorities are planning a six-lane M-9 Motorway to bolster Karachi-Hyderabad connectivity, facilitate trade, and promote industrial growth.
The estimated cost of the M-9 exceeds $600 million, with NESPAK engaged for a feasibility study and detailed design.
Pakistan has struggled to attract new foreign investment due to political instability, security concerns, and economic challenges.
However, securing Azerbaijani funding could provide a much-needed boost to infrastructure development and economic stability.
