Saudi Arabia grants Pakistan $380m loan
Riyadh, November 11, 2009
Saudi Arabia has granted Pakistan a $380 million soft loan to mainly support its budget, in the biggest single donation since donors pledged $5.7 billion of aid in April to the violence-torn country.
A senior Saudi official said the loan was part of $700 million Saudi Arabia has pledged to give Pakistan at the Tokyo donors meeting.
Nations pledged $5.7 billion in aid to Pakistan but a fraction of that has trickled in, with donors wanting more details on how the money will be spent and amid questions over how well the fragile civilian government is functioning.
The Pakistani central bank will get $200 million from Saudi Arabia for 'budget spending', $100 million will be a credit line to cover Pakistani imports of fertilizers from Saudi Fertilizers Co and $80 million will help finance a hydropower project in Pakistan, the official said.
'This ($380 million) loan was granted by the Saudi Development Fund which supports development in foreign countries by giving grants or soft loans,' the official said.
'Saudi Arabia is so far Pakistan's biggest donor under the Tokyo agreement ... We will deliver the remaining $320 million soon. We are working with Pakistani authorities to define areas of need,' he added.
Saudi Arabia is Pakistan's top Arab ally. Some 1.7 million Pakistani expatriates who live and work in Saudi Arabia sent home $1.8 billion in remittances in 2008, the official said.
The International Monetary Fund (IMF) has urged Pakistan to work harder on its own reforms and demanded that donors follow through on the aid promised for the Asian country.
The IMF bailed out Pakistan last November to avert a balance of payments crisis and in July it increased its loan to the country to $11.3 billion from an initial $7.6 billion.
Foreign Minister Shah Mehmood Qureshi said in August that Pakistan has so far received $300 million in aid for internally dislocated people.
Islamabad's civilian government is fighting against Islamist militancy led by the Taliban in northwest Pakistan.-Reuters