The United Arab Emirates (UAE) has agreed to roll over an existing $2 billion loan and provide an additional $1 billion to Pakistan, according to a statement from the Prime Minister’s Office released on Thursday.
The agreement follows a meeting between UAE President Sheikh Mohamed bin Zayed Al Nahyan and Prime Minister Shehbaz Sharif in Abu Dhabi. The Prime Minister is on a two-day visit aimed at strengthening economic, trade, and investment relations between the two nations.
The statement highlighted that during the meeting, Sheikh Mohamed praised the longstanding relationship between the UAE and Pakistan and acknowledged the contributions of Pakistanis living in the UAE.
“The leaders discussed the strong ties between Pakistan and the UAE and explored ways to enhance these relations, particularly in trade, investment, and energy. They also exchanged views on regional and global issues of mutual interest,” the statement read.
Both sides agreed to further deepen investment cooperation, encourage partnerships, and explore investment integration opportunities.
Prime Minister Shehbaz also invited President Sheikh Mohamed bin Zayed to visit Pakistan, a proposal which was accepted, with the dates to be finalized through diplomatic channels.
The Prime Minister will also meet with Sheikh Mohammad bin Rashid Al Maktoum, the UAE’s Vice President and Prime Minister, and ruler of Dubai. Additionally, he will engage with Emirati businessmen and investors to discuss strategies for boosting bilateral trade and investment.
This marks Prime Minister Shehbaz’s third visit to the UAE since taking office in April 2022. His previous visits were in April 2022 and May 2022, following the passing of UAE’s former president Sheikh Khalifa bin Zayed Al Nahyan.
The visit comes after the Chief of Army Staff (COAS) General Asim Munir’s visit to the UAE, where he met with the Emirati President to review bilateral cooperation.
The UAE’s decision to roll over the loan comes as Pakistan grapples with a severe cash crunch, with foreign exchange reserves dipping to an eight-year low of $5.576 billion at the end of December 2022—just enough for three weeks of imports. Reports later indicated a further decline to $4.5 billion after making loan repayments to two UAE banks, leaving the country with limited options to meet its foreign debt obligations.
Saudi Arabia Signs Agreement to Finance $1 Billion in Oil Derivatives for Pakistan
In a separate development, the Saudi Fund for Development (SFD) signed an agreement with Pakistan to finance $1 billion worth of oil derivatives. The agreement was signed by SFD CEO Sultan Abdulrahman Al Marshad and Secretary of the Ministry of Economic Affairs Dr. Kazim Niaz in Islamabad, with officials from both countries present.
This strategic agreement, aimed at supporting Pakistan’s economy and addressing its challenges, builds on previous Saudi support. In 2019 and 2021, the SFD signed agreements totaling $4.44 billion for oil derivatives.
Since its establishment, the SFD has supported over 40 development projects in Pakistan, contributing around $1.4 billion towards energy, water, transportation, and infrastructure initiatives.
