Government Targets $15bn Private Equity Investment
October 28, 2026
Pakistan is preparing a $500m Panda bond for April or May 2027 as it seeks to refinance Chinese commercial loans and diversify external financing.
Pakistan is planning a second Panda bond worth $500 million as the government looks to raise funds from China’s domestic capital market and address an outstanding refinancing gap involving Chinese commercial loans.
The proposed issuance is being prepared by the Ministry of Finance and could take place in April or May 2027, according to senior Finance Division officials cited by The News. The government is also examining Chinese credit enhancement institutions as an alternative to multilateral guarantees.
Pakistan’s first Panda bond, issued in May 2026, raised 1.75 billion yuan, equivalent to about $258m. That transaction carried guarantees from the Asian Development Bank (ADB) and Asian Infrastructure Investment Bank (AIIB) and financed the Sustainable and Green Infrastructure Project.
For the second issuance, officials are considering a structure that would allow Pakistan to enter the Chinese bond market without guarantees from either development bank. Chinese credit enhancement companies could potentially provide support for the transaction.
The move comes as Pakistan continues efforts to restore $1.3bn in Chinese commercial financing that had previously been repaid on the expectation that the amount would subsequently be rolled over or replenished. While some of the financing has been restored, the full amount remains outstanding, prompting the government to explore additional sources of funds in China.
Finance Ministry officials said the experience of the first issuance has given Pakistan greater familiarity with the requirements of China’s capital market, potentially making preparations for another transaction more streamlined.
The inaugural Panda bond was notable for obtaining a domestic AAA rating despite receiving less than full guarantee coverage. According to the development banks, the structure demonstrated how partial credit guarantees can help emerging economies attract private investment.
Funds from the first issuance were allocated to areas including water management, energy reliability and efficiency, and healthcare capacity. The transaction also supported Pakistan’s broader objective of expanding its external financing options and securing resources for sustainable infrastructure.
The proposed second bond would therefore extend Pakistan’s presence in China’s renminbi-denominated debt market while testing whether alternative credit enhancement arrangements can reduce reliance on multilateral guarantees.
If completed at the targeted value, the two Panda bond issues would have a combined value of approximately $758m.
