The National Assembly passed the Pakistan Sovereign Wealth Fund 2023 Bill on Monday, which calls for the establishment of a Fund controlled by the federal government, with a head office in Islamabad and other offices in Pakistan and overseas.
According to the bill, the Fund will have financial and administrative independence. Its resources will be provided by the State Bank of Pakistan (SBP), the federal government, and the transfer of current federal government assets such as real estate and assets of state-owned firms.
The Fund’s authorized capital will be one hundred trillion rupees paid in cash by the federal government, which can be augmented when necessary.
What Will the Fund Do?
- Invest in, purchase, maintain, divest through sell, or otherwise realize assets and investment of any kind;
- Sale and purchase of domestic and foreign equity securities, debt securities, derivatives, commodities and other financial assets;
- Developing rights on immovable, and all kinds of tangible assets;
- Project development, fundraising based on projects, foreign project credit extensions, and resource procurement through other means;
- Conducting any kinds of commercial and financial activities in domestic and foreign primary and secondary markets;
- Participating in domestic investments and foreign investments conducted by other states and foreign companies;
- Investing in financial instruments issued domestically or foreign investment instruments;
- Participating in alt kinds of money market operations;
- Acquiring, retaining, and disposing of assets of any type in satisfaction of its claims;
- Entering into an agreement as a private party or implementing agency in Public Private Partnership;
- Appointing managers, custodians, consultants, attorneys, agents, and any other professional advisors for the effective management of the Fund;
- Purchasing or otherwise acquiring, owning, selling, transferring, and exchanging any tangible and intangible, movable or immovable property or any rights, title or interest in such property acquired or vested in Fund for the conduct of its business;
- Accepting and furnishing any lien, charge, hypothecation, or mortgage of any tangible or intangible movable or immovable property or assets in the conduct of its business receiving and paying commissions, fees, and brokerage in connection with its business;
- Establishing any entity constituted, organized, and operated in compliance with applicable law, including funds, sub-funds, any company, corporation, trust, limited liability partnership, or a joint venture solely or jointly with other investors.
- Coordinating and taking local or foreign technical assistance including exchange of experiences and capacity building to achieve objectives of the fund; entering into agreements and contracts and executing such documents as may be considered necessary to achieve its objectives;
- Borrowing or raising any money in such manner and upon such security as the fund may consider fit;
- Participate in the process of privatization to acquire ownership of state-owned enterprises or to provide financial advisory services in the privatization process;
- Doing all such acts and things as may be incidental or subsidiary to transacting any of the aforesaid businesses; and
- Doing such other acts and things in furtherance of purposes of this Act as may be approved by the Supervisory Council.
According to the bill, a Supervisory Council will oversee the workings of the Fund. The council will consist of the Prime Minister, Finance Minister, Planning Minister, Finance Secretary, Governor State Bank of Pakistan, and CEO of the Fund.
The Council will also appoint a Board of the Fund with 7 members (directors) from the private sector. The term of every director of the Board shall be five years from the date of appointment. The director of the Board shall be eligible for reappointment for one or more additional terms.
Interestingly, the entire ownership of the federal government in the following assets will be transferred to the Fund.
| S. No. | Name of Company | Government Shareholding (No. of shares) |
| 1 | Oil and Gas Development Company Limited | 3,657,079,419 |
| 2 | Pakistan Petroleum Limited | 1,952,181,498 |
| 3 | National Bank of Pakistan | 1,608,420,866 |
| 4 | Government Holdings (Private) Limited | 2,088,512,092 |
| 5 | Pakistan Development Fund Limited | 6,000,000,000 |
| 6 | Mari Petroleum Company Limited | 24,532,720 |
| 7 | Neelum-Jhelum Hydro-Power Company (Private) Limited | 416,634,630 |
Public Disclosure of Information
The Fund will determine what information is made public about its practices/activities.
Furthermore, except as mandated by a court, no members of the board or staff of the Fund shall divulge to any person any information relevant to the Board’s or Fund’s affairs.
In order to accelerate economic growth and fulfill the requirement of infrastructure development in the country, the coalition government sees this bill as a need to make this law for the establishment of the Fund.
Authorities hope that the Fund would help decrease the dependence on the government’s resources for capital formation for long-term developmental projects.
