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January 23, 2026
Pakistan is negotiating with the World Bank, Asian Development Bank, and Saudi Arabia to secure $36 billion in long-term financing over 13 years starting FY27.
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Pakistan is in advanced talks with global financial institutions and Saudi Arabia to arrange $36 billion in long-term financing to refinance the country’s power sector debt obligations. The refinancing plan, spread over 13 years beginning FY27, is designed to ease the burden of debt servicing and lower industrial electricity tariffs.
Officials confirmed discussions with The World Bank and Asian Development Bank (ADB) at an indicative interest rate of around 2%, while Saudi Arabia is being engaged for financing at nearly 1%. “This refinancing is critical to stabilizing tariffs and ensuring competitiveness for industry,” an official said.
The Power Division has already presented proposals to international lenders, with annual refinancing needs ranging from $4.4 billion in FY27 to $1.2 billion in FY39. Pakistan’s circular debt currently stands at Rs1.8 trillion, with the government targeting Rs1.6 trillion by mid-2026.
Recent measures include raising Rs1.225 trillion from commercial banks and continuing recovery of a Rs3.23 per unit debt service charge for six years. Projections suggest industrial tariffs could remain between 8–9 cents per unit under the refinancing plan, depending on the source and interest rate of financing.
