Pakistan Gains Strong Backing for Panda Bonds
Pakistan secures $285m ADB, AIIB guarantees for Panda Bonds, clearing the path for its debut issuance in China’s Interbank Bond Market. The $250m renminbi-denominated issue will finance healthcare, energy, and infrastructure projects.
The guarantees were approved by the Central Development Working Party (CDWP) under Planning Minister Ahsan Iqbal. The Asian Development Bank (ADB) will provide $160m, while the Asian Infrastructure Investment Bank (AIIB) will back $125m. Together, they cover 95% of principal and interest, ensuring a domestic AAA rating in China.
Bond Terms and Use of Proceeds
The three-year fixed-rate Panda Bond will be offered to institutional investors at a coupon range of 3–4%. China International Capital Corporation and Habib Bank Ltd will manage the issuance.
Proceeds will support key national projects, including:
$76m for the Jinnah Medical Complex in Karachi.
$27m for cancer hospital equipment in Islamabad.
$76.5m for a telemetry system on the Indus River.
$71m for strengthening power distribution in Lahore, Sukkur, and Multan.
Broader Development Agenda
The CDWP also cleared seven projects worth Rs 236 bn. Smaller schemes include Rs1.38bn for education reforms, Rs1.85bn for a National Centre for Brand Development, and Rs4.67bn for an overhead bridge at Shahdara.
Meanwhile, four large projects valued at Rs228bn were referred to Ecnec. These cover the Nawaz Sharif Institute of Cancer Treatment (Rs74.9bn), Harpo Hydropower Project in Gilgit-Baltistan (Rs34.3bn), Rs68.7bn for Karachi-Lahore Motorway land acquisition, and Rs49.9bn for Balochistan water development.
Focus on Transparency and Accountability
Planning Minister Ahsan Iqbal emphasised transparency in all projects funded through the Panda Bonds. He directed reviews of foreign-funded education initiatives, pointing to weak results despite heavy borrowing. He also insisted that new foreign loans should not be signed without rupee cover in the PSDP, warning that delays could trigger another circular debt crisis.
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