Pakistan has hired banks for a possible foreign-currency bond offering, Bloomberg reported on Wednesday.
The international banks mandated by the government include Deutsche Bank AG, JPMorgan Chase & Co., Credit Suisse Group AG, Standard Chartered Plc, and Emirates NBD Bank PJSC, the news report revealed.
Pakistan has reached an agreement with the International Monetary Fund (IMF) on the resumption of a $6 billion bailout program and is now seeking to raise funds. The agreement with the IMF was secured in 2019 to avoid bankruptcy. In addition to the package, Pakistan is also looking to raise additional funds through an issue of $500 million green note within the next few months.
The primary project that to be financed through these green bonds is the development of Pakistan’s hydroelectric power sector, said the report.
Muhammad Umar Zahid, Director Debt at the Ministry of Finance, announced during a webinar in February 2021 that Pakistan will be aiming for $1.5 billion in global bonds, provided that international market conditions were conducive.
For that purpose, the government had been setting up a medium-term note program that will be registered for 12 months instead of a single transaction, he added.
Economic recovery in the post lockdown period has increased borrowing costs in debt markets worldwide, and that is currently posing a challenge for Pakistan. The third wave of the pandemic is also causing problems for the government in managing economic activity, as a spike in Covid-19 cases has led to newer restrictions in several major cities once again as well.