Pakistan eyes new financing deals to extend debt maturities

October 17, 2026 (MLN): Pakistan has explored new financing avenues, including Sukuk issuances, Panda Bonds, debt swaps, secured financing and public-private partnerships, as the government seeks to extend debt maturities, reduce repayment pressures and strengthen access to international capital markets.

The discussions took place during a series of meetings held by Finance Minister Senator Muhammad Aurangzeb with international development partners, financial institutions and the International Monetary Fund (IMF) on the sidelines of the IMF-World Bank Annual Meetings in Bangkok, Thailand.

Engagements with Sharjah Islamic Bank, Abu Dhabi Commercial Bank (ADCB), Ajman Bank and J.P. Morgan focused on Pakistan’s financing needs, investment prospects and economic outlook.

The minister highlighted progress under the IMF programme, fiscal consolidation, stronger foreign exchange reserves, improved sovereign credit ratings and restored access to international capital markets.

The government remains committed to macroeconomic stability, structural reforms and sustainable, export-led growth, the minister reiterated during the meetings.

The financial discussions covered potential Sukuk issuances, rupee-denominated dollar-settled instruments, additional Panda Bond issuance and possible Eurobond tokenization.

Muhammad Aurangzeb emphasized replacing expensive short-term borrowing with longer-term financing to reduce repayment concentrations without increasing the overall external debt burden.

The parties also discussed MIGA-backed financing, restored credit limits for Pakistan, participation in ITFC financing, IFC-supported transactions, rupee financing and potential loan conversions.

Sharjah Islamic Bank reaffirmed its support and readiness to participate in a Sukuk issuance, while the minister welcomed the institutions’ interest in advising on future financing transactions.

Investment discussions extended to refinery upgrades, power distribution privatization, airport outsourcing, electricity transmission and the Main Line-I (ML-1) railway project.

Potential financing for data centres and digital finance was also considered, with the minister stressing the importance of competitive electricity pricing and an effective regulatory framework.

The meetings further explored expanding credit for businesses, small and medium-sized enterprises (SMEs) and agriculture, alongside developing capital market benchmarks through financial institution issuances.

During his engagement with J.P. Morgan, Muhammad Aurangzeb discussed Pakistan’s ambition to achieve a sovereign credit rating in the BB category.

The bank offered analytical support on relevant indicators and institutional improvements, while discussions also covered investor engagement, private-placement underwriting, credit enhancement, secured financing and potential debt swaps.

The minister also met Alexander De Croo, Administrator of the United Nations Development Programme (UNDP) and UN Under-Secretary-General, to discuss development financing, climate resilience and employment generation.

Both sides explored ways to convert existing financing arrangements and policy frameworks into bankable projects, including UNDP’s Implementation Bridge, an investable project pipeline through the SDG Investment Fair and the V20 platform, blended finance, public-private partnerships and closer cooperation between UNDP and the World Bank.

The discussion also covered biodiversity financing and potential debt-for-nature and debt-for-climate swaps, taking into account Pakistan’s external debt composition. Opportunities in climate risk insurance, including the Global Shield and parametric insurance, were also examined.

Muhammad Aurangzeb highlighted the role of private-sector-led employment, cash flow-based lending, digital finance and guarantees in improving access to funding for small businesses and farmers.

In a separate meeting with Jihad Azour, Director of the IMF’s Middle East and Central Asia Department, the minister reviewed Pakistan’s economic performance and reform agenda, including revenue mobilization, inflation, growth and the current account.

The two sides discussed the economic implications of regional conflict and Pakistan’s resilience amid uncertainty. Muhammad Aurangzeb outlined measures concerning energy procurement and winter preparedness, while highlighting adequate fertilizer supplies to protect food security.

The minister also pointed to stronger foreign exchange reserves, reduced forward foreign exchange liabilities, longer debt maturities and lower external repayment requirements.

He reaffirmed the government’s commitment to maintaining primary budget surpluses, reducing public debt and pursuing growth-friendly tax reforms while safeguarding social spending.

Privatization, greater private-sector participation and export-oriented growth were also discussed as priorities for strengthening economic resilience and creditworthiness.

Both sides stressed the need to sustain reform momentum, ensure political commitment and improve communication, while recognizing the relationship between economic stability and national security.

On the sidelines of the annual meetings, Muhammad Aurangzeb also engaged with international media, highlighting Pakistan’s economic stabilization, resilient remittance inflows, investment opportunities and progress under the IMF programme.

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