Islamabad, Apr 24, 2025: Pakistan has reached an agreement with Standard Chartered Bank and Dubai Islamic Bank for a $1 billion loan, with an interest rate of around 7.6%.
This arrangement is contingent upon securing a $500 million guarantee from the Asian Development Bank (ADB), with the board set to approve the guarantee on May 28.
The loan’s interest rate will be variable, based on the Secured Overnight Financing Rate (SOFR), plus 3.25%. Once the ADB’s approval is obtained, the loan is expected to be disbursed in the second half of June.
The ADB will impose a minimal upfront fee for providing its guarantee.
Previously, Pakistan had rejected a $600 million loan offer from Standard Chartered Bank due to unfavorable market conditions, where the proposed interest rate was nearly 11%.
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For the current fiscal year, the Pakistani government had set aside $3.8 billion for foreign commercial borrowing, yet only $500 million has been secured so far.
Pakistan’s overall external financing target for the year is $23.4 billion, which includes $13 billion in rollovers from China, Saudi Arabia, the UAE, and Kuwait.
Additionally, a $1.3 billion loan from China has already been repaid, with plans for near-term refinancing.
