Pakistan secures $250m loan for Reko Diq project despite Indian opposition
Listen to article
In a significant win for Pakistan, the International Finance Corporation (IFC) and the World Bank have approved a concessional loan of $250 million for the Reko Diq project, a major mining and resource development initiative.
This approval, granted during a board meeting in Washington, is a significant diplomatic victory for Pakistan and a major setback for India, which had actively lobbied against the funding.
As a result of this approval, the private sector is expected to invest $2.5 billion in the Reko Diq project, one of Pakistan's most important initiatives. The success in securing this loan is a testament to the effective diplomatic efforts of Pakistan, especially in light of opposition from India.
Dr Tauqeer Hussain Shah, advisor to the prime minister, played a key role in this achievement. He spearheaded efforts at the World Bank, successfully lobbying for the loan. His contributions were instrumental in securing this approval, marking a major milestone in the success of the Reko Diq project.
This loan approval strengthens Pakistan's economic position and highlights its successful diplomatic maneuvering in securing vital investments for the nation's future. The backing of this large-scale project is particularly significant in light of regional geopolitical tensions, with India actively seeking to block the project's financing.
With this decision, Pakistan has taken a crucial step forward in securing the success of the Reko Diq project, which is expected to play a pivotal role in the country's resource development sector.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
7 hours ago
- Business Recorder
Implementation progress declines: Sindh solar project faces setbacks
ISLAMABAD: Overall, the implementation progress under the Sindh solar project has declined compared to the last two supervisions and will unlikely be completed by the project closing date. Official documents revealed that the bank has disbursed $92.6 million of the revised total $95.09 million (original $100 million) so far and the overall implementation progress remains moderately unsatisfactory. The project was approved by the World Bank's Board of Executive Directors on June 14, 2018, and became effective on January 9, 2019. The original closing date was 29 September 2023, which has been revised to 31 July 2025. Solar energy and housing projects: Panel assails Sindh govt for 'mismanagement' Documents noted that overall, implementation progress under the Sindh Solar project has declined compared to the last two supervision missions in January and April 2025. The PMU has committed all available project funds and disbursed around 95 per cent of the allocation, with plans to reach 100 per cent by the project's closing date. However, progress under each component of the project is lagging and will unlikely be completed by the project closing date. To conclude the project, the Government of Sindh (GoS) and PMU will prepare and submit a Post-Closure Action Plan, with GoS providing funding, and the PMU to remain operational to complete all post-closure actions. Copyright Business Recorder, 2025
Express Tribune
a day ago
- Express Tribune
Donors offer $5b for Reko Diq
Pakistan has received an overwhelming response from multinational donors and agencies, which have offered $5 billion in financing to execute the multibillion-dollar Reko Diq copper and gold mining project in Balochistan. Sources told The Express Tribune that the commitments received from foreign donors were more than the funding requirement for the Reko Diq project, which is estimated at $3 billion. They said that the donors included the Asian Development Bank (ADB), Islamic Development Bank (IDB), International Finance Corporation (IFC) and US Exim Bank. Development agencies from Germany and Denmark have also offered financing. According to sources, the financial close of the project is at an advanced stage and Petroleum Minister Ali Pervaiz Malik, backed by the Special Investment Facilitation Council (SIFC), is taking the lead and making aggressive efforts to expedite work, which will pave the way for exploring the entire potential of the mining sector. It is interesting to note that the US Exim Bank has offered no cap on financing and is ready to provide capital, which Pakistan and other partners desperately need. The Ministry of Petroleum recently organised a webinar in association with the US embassy to woo American investors to participate in mining projects in Pakistan. State-owned exploration giant Oil and Gas Development Company (OGDC) is a key partner in the Reko Diq project and efforts are underway to kick off work. It also helped arrange a mineral conference, which attracted financing offers. Pakistan is blessed with abundant mineral resources that hold immense potential for fuelling economic growth and industrial development. The country's vast reserves of minerals, including coal, copper, gold, iron ore, chromite and precious stones, provide a solid foundation for the mining sector to thrive and contribute to economic development. Despite its huge potential, the mineral sector currently contributes around 3.2% to the gross domestic product (GDP), with exports accounting for only 0.1% of the world's total. However, with increasing exploration, foreign investment and infrastructure improvements, the mining industry is poised for significant expansion. Pakistan's mineral-rich landscape covers an outcrop area of approximately 600,000 square kilometres. With 92 known minerals, 52 of which are commercially exploited, Pakistan produces an estimated 68.52 million metric tons of minerals annually. The sector supports over 5,000 operational mines and 50,000 small and medium enterprises (SMEs), providing direct employment to 300,000 workers. Some of the country's most notable mineral reserves include the world's second-largest salt mines, the fifth-largest copper and gold deposits and significant coal reserves. Furthermore, Pakistan holds vast quantities of bauxite, gypsum and precious stones such as ruby, topaz, and emerald, which offer considerable export potential. Globally, mineral resources play a crucial role in economic development. Many developed countries, including China, Italy, Turkiye, Spain and Brazil, have effectively leveraged their mineral wealth to fuel industrial growth, increase employment and enhance per-capita income. Pakistan's mineral sector holds similar promise. With strategic planning and investment, the country can improve trade, generate employment and facilitate infrastructure development, ultimately accelerating economic progress. The local mining sector is increasingly attracting foreign investment, with global firms eyeing the untapped mineral reserves. The Reko Diq copper and gold project, located in the Chagai district of Balochistan, has the world's largest untapped copper reserves and stands as a milestone for Pakistan's mining ambitions. The project, revived by Canada's Barrick Gold, is expected to start producing copper and gold by 2028, with an initial investment of $5.5 billion. According to Mark Bristow, CEO of Barrick Gold, which owns a 50% stake in the project, the reserves are expected to generate $74 billion in free cash flow over the next 37 years. The mine is anticipated to generate $2.8 billion in annual exports, create thousands of jobs and transform the local economy. A planned expansion will increase copper production to 400,000 tonnes and gold output to 500,000 ounces per year, with an additional investment of $3.5 billion. Under an intergovernmental transaction agreement, the federal cabinet has approved the sale of a 15% stake in the Reko Diq project to Saudi Arabia. This underscores the region's potential as a hub for foreign investment in the mining sector. Saudi Arabian mining company Manara Minerals will acquire the 15% stake, potentially involving an investment of $1 billion. Logistics for the Reko Diq mine will be managed through a railway track, which is being built in partnership with Pakistan Railways. Railway tracks will essentially entail moving mining supplies to Karachi and eventually exporting copper concentrate and gold.
Business Recorder
a day ago
- Business Recorder
K-IV project: CM slams Centre for allocating only Rs3bn this year
KARACHI: Chief Minister Sindh, Syed Murad Ali Shah, while emphasising the urgent need to address Karachi's water challenges, criticised the federal government for allocating only Rs 3 billion this year out of the Rs 78 billion it had committed for K-IV project. In contrast, he said, the Sindh government has provided complete funding for all associated components of the important K-IV project. 'Four major sub-projects under K-IV are currently underway and Rs 50 billion project to expand the capacity of the water feeders will be completed this year. Another Rs 170 billion initiative is bringing water from Keenjhar Lake to Karachi, and a power plant is being installed via STDC to support two major pumping stations,' he added while inaugurating the 20th 'My Karachi-Oasis of Harmony' International Exhibition at the Expo Center Karachi on Friday. The chief minister announced that the Sindh government has completed the construction of a new 100 MGD Hub Canal which will be inaugurated on August 14. The old Hub Canal will also be restored and upgraded to 100 MGD capacity. By the end of this year, Karachi is expected to start receiving 200 MGD water from Hub Dam. He also highlighted the importance of the Dumlottee water supply project for southern Karachi and anticipated that 150 MGD additional water will be supplied to the city during the current year. He demanded that the federal government must increase Karachi's water allocation from Hub Dam, especially as water availability has improved due to climatic conditions. The chief minister, while warmly congratulating the Karachi Chamber on successfully organising the landmark 20th edition of the exhibition, stated that it has become a true symbol of Karachi's entrepreneurial energy, resilience, and cultural vibrancy. Announcing the commencement of Independence Day celebrations across Sindh on Friday (Aug 01) which will continue until August 14 under the theme 'Maarka-e-Haq,' he said that the theme reflects Pakistan's ongoing struggle for sovereignty, justice, and unity. Referring to the regional tensions, he stated that the people of Pakistan have proven their unity and resolve by giving a robust response to India's May 2025 conspiracy. Highlighting development issues, the chief minister referenced the 2015–16 World Bank gap analysis, which revealed that Karachi required Rs 3 trillion in investment to meet the standards of a modern metropolitan city. He emphasised that such large-scale projects cannot be undertaken by the provincial government alone and require active participation from the federal government. Addressing the issue of natural gas, the chief minister lamented that although Sindh produced 70 percent of Pakistan's gas, it does not receive its constitutional share. He criticised the federal government for not convening the Council of Common Interests (CCI) meeting for the past one and a half years and vowed to raise Sindh's case forcefully in the next session. He reminded that according to the Constitution, the CCI must meet every three months. He also called on citizens to fulfill their legal responsibilities, particularly by registering their vehicles and paying taxes, instead of blaming law enforcement agencies for lapses. He reassured the business community that the Sindh government stands shoulder to shoulder with them and with the Karachi Chamber. Murad Ali Shah strongly asserted that any hostile intentions toward Pakistan would be met with a firm response. 'Pakistan enjoys robust trade relations globally and every country is keen to do business with Pakistan,' he added. Chairman BMG Zubair Motiwala, in his remarks, paid glowing tribute to Sindh government for extending full support and cooperation to KCCI in dealing with numerous issues being faced by the business community in Karachi. He stressed that the business community needs more support in dealing with numerous issues which have been pending since long, particularly the gas shortages. He also sought CM's help in resolving the water shortages being faced by the industries of Karachi by expediting development work of K-IV project that must be completed at the earliest possible time. Highlighting the purpose and salient features of My Karachi Exhibition, he appreciated Foreign Diplomats for their participation in 20th My Karachi Exhibition which was being staged every year to portray the positive image of Karachi and this exhibition is not only recognized in Pakistan but all over the world. 'This exhibition successfully showcases what is being produced in Pakistan and how excellently the manufacturing and trading sectors are performing,' he added while requesting the diplomats to convey a positive message about Karachi in their reports to respective countries. President KCCI Jawed Bilwani, while delivering the welcome address, expressed deep appreciation to the Sindh Government for choosing 'Marka-e-Haq' as this year's theme for Independence Day celebrations, calling it a meaningful and inspiring tribute to the truth of the Pakistan Movement and the valiant role of Pakistan's armed forces in defending the nation against aggression. Highlighting the origin and journey of the 'My Karachi' Exhibition, President Bilwani recalled that the event was initiated in 2004 under the dynamic leadership of the late Siraj Kassim Teli, founder Chairman BMG, at a time when Karachi was being negatively portrayed globally. 'The exhibition was envisioned to show the world that Karachi is not only a peaceful city but also the economic lifeline of Pakistan,' he said. He said, 'Despite repeated demands, Karachi's only Expo Center has yet to be upgraded to international standards. We urge the Sindh government to also establish a separate world-class Expo Centre in Karachi at the provincial level to help showcase Sindh's products globally.' He further highlighted the severe shortage of water in Karachi, pointing out that while the city's daily demand exceeds 1,200 MGD, supply remains limited to 550–650 MGD. 'Over two decades have passed listening to promises about the K-IV water project, yet it remains incomplete. On top of that, Karachiites are subjected to the highest water tariffs in the country. Is this the reward for contributing the most in taxes?' he questioned. President Bilwani also raised serious concerns over gas shortages, despite Sindh producing over 70% of Pakistan's natural gas. He urged the Sindh government to actively pursue the province's constitutional right to a fair share of gas supply from the federal government. Touching upon Karachi's deteriorating infrastructure, he emphasized the urgent need for rehabilitation of roads, drainage systems, removal of encroachments, and improved traffic management. He also called for expedited work on delayed development projects and a robust strategy to tackle rising street crime through enhanced policing, accelerated implementation of the Safe City Project, and upgraded surveillance systems. Sindh Minister for Industries and Production Ikramullah Khan Dharejo, Sindh Minister for Local Governments Saeed Ghani, Additional IGP Jawed Alam Odho, Vice Chairman BMG, Vice Chairman BMG Mian Abrar Ahmed, Senior Vice President Zia ul Arfeen, Vice President Faisal Khalil, Chairman Special Committee for My Karachi Exhibition Muhammad Idrees, diplomats from friendly countries, KCCI Managing Committee Members and others distinguished figures were also present on the occasion. Copyright Business Recorder, 2025
