Saudi Arabia’s $800 Million Investment in Recodek Likely to be Finalized This Week
Saudi Arabia is on the verge of finalizing an $800 million investment deal in Pakistan’s Recodek project, with the agreement expected to be concluded this week.
Breakdown of the Investment
According to sources, the deal includes $650 million in direct investment and an additional $150 million grant aimed at development in the Chagai district. This investment is seen as a crucial step for Pakistan, as it could facilitate the approval of the IMF Executive Board. Following the Saudi investment and loan rollover, China is also expected to roll over its loans to Pakistan.
Government Briefing and Final Approval
Officials from the Ministry of Energy are scheduled to brief the Prime Minister today regarding the Recodek investment. The briefing will pave the way for the Prime Minister to present the proposal at the upcoming federal cabinet meeting for final approval.
Role of SIFC in Facilitating the Investment
The Special Investment Facilitation Council (SIFC) has played a key role in securing this investment from Saudi Arabia, effectively removing the barriers that previously hindered Saudi investment in Pakistan.
Additional Saudi Investments and Oil Facility
Pakistan had initially estimated $900 million for the Saudi investment in Recodek, with further investments expected in exploration leases Block 6 and Block 8. The total Saudi investment in Recodek could reach $10 billion.
Additionally, Pakistan is seeking to revive the oil facility from Saudi Arabia on deferred payments, which could bring an extra $2 billion to help cover the country’s external financing gap. The previous oil facility agreement between Saudi Arabia and Pakistan on deferred payments continued until December 2023.
This potential investment from Saudi Arabia marks a significant step in strengthening economic ties between the two countries and could provide much-needed relief to Pakistan’s economy.