By Muhammad Luqman
After seeking aid and grant from Riyadh for over four decades, Pakistan is now poised to sign investment deals with Saudi Arabia worth billions of dollars during an upcoming visit of Crown Prince Mohammad Bin Salman, including a multibillion dollar oil refinery in port city of Gwadar.
“Pakistan and Saudi Arabia will sign three memoranda of understanding for investment in oil, renewable energy and mineral sectors during the royal visit,” says Prime Minister’s Adviser on Commerce and Investment Abdul Razak Dawood .
An agreement for $3 billion oil facility on deferred payments will also be signed during the visit, according to Ministry of trade officials.
Pakistan will also ask Saudi Arabia to take part in the privatisation of over $2 billion worth of LNG-fired two power plants, although the kingdom had earlier showed interest in buying those units only under a government-to-government deal.
An estimated minimum $10 billion to $12 billion Saudi investment may pour in Pakistan in the medium term, the officials said.
A strong Saudi delegation comprising 600 to 700 delegates — including 40 private investors — would visit Pakistan, at the weekend, said Board of Investment Chairman Haroon Sharif.
Prince Mohammed is expected to arrive in Pakistan this week, although an exact date of his arrival has not yet been officially disclosed. It is expected the crown prince would arrive on Saturday or Sunday.
His security team, comprising 170 personnel, has already arrived in Pakistan and is visiting various places in Islamabad.
The investment deals with Saudi Arabia will mark a partial departure from Pakistan’s decades-old policy of begging from Saudi Arabia in difficult economic times, newspaper Daily The News reported.
In 1998, after the nuclear explosions, Saudi Arabia had given free oil facility to Pakistan that continued for many years.
In 2014, the then PML-N government had secured $1.5 billion “gift” from Saudi Arabia. However, the government did not issue official statement regarding the purpose of the grant.
This time also, Saudi Arabia has agreed to give $3 billion annual oil facility on deferred payments, which can be rolled over for three years period.
In addition, Pakistan has also obtained $3 billion Saudi loan at 3.18% interest rate to shore up official foreign currency reserves.
Saudi Arabia’s main regional rival, Iran has welcomed the visit of Saudi Crown Prince Muhammad bin Salman (MBS) to Pakistan and fiscal assistance being provided by Saudi Kingdom to Pakistan.
Ambassador Iran Mehdi Honardoost recently told media in the capital Islamabad, that not only Saudi Arabia but any of Arab countries support for Pakistan would be hailed by Iran evidently. “We appreciate Saudi Arabia’s cooperation and help for Pakistan hundred percent.