PPL ups Reko Diq funding to $715m for Phase 1

August 19, 2025 (MLN): Pakistan Petroleum Limited (PSX: PPL) has approved an increase in its pro-rata funding commitment for Phase 1 of the Reko Diq copper and gold project to $715 million, inclusive of project financing costs.

After accounting for financing secured by Reko Diq Mining Company (RDMC), PPL’s shareholder contribution is expected to reach $391m.

PPL, which holds an 8.33% stake in the project, is part of a consortium of three state-owned enterprises (SOEs) along with Oil and Gas Development Company Limited (OGDCL) and Government Holdings (Private) Limited (GHPL), collectively holding a 25% interest.

The Government of Balochistan holds 25%, while the remaining 50% is owned indirectly by Barrick Mining Corporation, the operator.

The company’s earlier funding approval in March 2025 stood at $627m, with a shareholder contribution of $349m.

However, following advanced negotiations with lenders and revisions in project cost estimates, the commitment has been increased.

The Phase 1 development cost has risen due to a six-month delay in production start (now expected in 2029 instead of 2028), higher contingencies recommended by the Independent Technical Consultant, and an increase in project financing to $3.5 billion from the earlier $3bn.

The project remains economically viable despite the cost escalations.

To support financing, PPL’s Board has also approved execution of key agreements, including the SOE Completion Agreement and the Transfer Restrictions Agreement.

The SOE Completion Agreement entails a joint and several guarantee by the SOEs for their pro-rata share (27.7778%) of RDMC’s secured debt obligations, remaining effective until financial completion.

The Transfer Restrictions Agreement sets minimum shareholding requirements for the project’s sponsors, including SOEs, until full repayment of project debt.

The approvals remain contingent upon requisite shareholder and regulatory approvals.

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