Islamabad: The federal cabinet approved the acquisition of the loan through a summary circulation. The loan from China will be for three years.
The 2.4 billion dollar loan from China will be received at one percent margin. The loan will be received under the 2019 agreement. The federal cabinet has approved the finance ministry’s summary.
According to sources, the federal cabinet has granted its important approval through a circulation of summary to obtain the loan facility at one percent margin from China for a three years period under an agreement signed by the previous government in year 2019.
“[The] Cabinet has approved the finance Ministry’s summary to get a two billion and forty crore dollar worth loan from China,” said the sources.
They added that the Prime Minister has approved the placement of the summary before the cabinet through circulation under Rule 17 (1) (b) of the Rules of Business 1973 in view of the urgency to relieve the current pressures on the exchange rate.
According to available document titled as RMB 15 billion syndicate loan facility from China Development Bank, Industrial and Commercial Bank of China and Bank of China, China Development Bank in capacity of agent bank to the syndicated loan facility from consortium of Chinese banks i.e. China Development Bank, Industrial and Commercial Bank of China and Bank of China has granted to extend RMB 15 billion facility (US$2,4000.00 million) for a three years period at six month SHIBOR+1.50 percent margin.
This facility was earlier extended in March 2019 which matured on March 24, 2022. The Chinese side has reduced the margin by one percent as compared with the previous facility. The draft Facility Agreement shared by China Development Bank was forwarded to the Ministry of Law and Justice and the Office of the Attorney General for Pakistan for vetting and clearance in light of the cabinet decisions dated May 14, 2019.
As per the document, the Ministry of Law and Justice has cleared the draft agreement subject to fulfilment of all codal formalities. The clauses under waiver of immunities in the draft Facility Agreement are the same as those under Facility Agreement executed on March 19, 2019.
“Approval of the cabinet is solicited to the draft Facility Agreement in terms of Rule 16 (1) (d) of the Rules of Business 1973 as well as in view of the observations of the Office of Attorney General for Pakistan,” the document added.