Pakistan secures $4.5bn Islamic finance deal to address power sector debt

From Yahoo Finance: 2025-06-23 05:26:00

Pakistan has secured a $4.5bn Islamic finance facility with 18 commercial banks to tackle power sector debt. The financing will address unpaid bills and subsidies, easing economic constraints. The government faces a liquidity crisis affecting supply chains and investment opportunities. The facility, based on KIBOR minus 0.9%, aims to alleviate financial burdens under the IMF programme.

The loan will be repaid over six years, with PKR323bn allocated annually for amortisation. Power Minister Awais Leghari assures it will not add to public debt. The agreement aligns with Pakistan’s goal to transition to interest-free banking by 2028. This move comes after ADB approved a $200m loan to enhance power distribution infrastructure in December 2024.



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