Finance Ministry adviser Khurram Shahzad has clarified that no government loan or sovereign guarantee has been declared to finance new aircraft for the privatised Pakistan International Airlines (PIA).
In a statement shared on social media, Shahzad emphasized that the government is neither purchasing aircraft for PIA nor providing any sovereign guarantee or taxpayer-funded loan for this purpose. He noted that some ongoing discussions have misinterpreted the concepts of privatisation and the function of export credit agencies.
He explained that the US Export-Import Bank (US EXIM), similar to other export credit agencies, supports its domestic exports and employment by offering financing assistance to foreign buyers of US-made aircraft, including airlines. The US EXIM’s financing model is asset-backed, meaning the aircraft itself serves as collateral. Creditworthiness can be evaluated based on the airline, lessee, or guarantor involved, making a sovereign guarantee not an automatic necessity.
Shahzad further clarified that the government’s role is to facilitate access to international financing, technology, and suppliers, while encouraging investment and commercial opportunities. He highlighted that Finance Minister Mohammad Aurangzeb’s discussions with US EXIM extend beyond PIA, covering potential financing for aviation, refinery upgrades, and the Reko Diq mining project, reflecting a broader Pakistan-US economic partnership.
In a significant development, Shahzad reiterated that the government’s economic strategy focuses on reducing state involvement in commercial enterprises, promoting privatisation, and expanding space for private capital. He stressed that fostering private-sector-led growth does not mean the government will abandon the private sector but rather enable businesses to thrive independently.
The adviser cautioned against presenting claims of a “public loan,” “hidden subsidy,” “state backstop,” or taxpayers assuming PIA’s commercial risks as facts, since no such arrangements have been announced. He emphasized that official statements only mention potential US EXIM financing support and do not indicate government borrowing or sovereign guarantees for PIA.
Shahzad concluded by stating that privatisation transfers ownership and commercial management to the private sector but does not prevent the government from facilitating opportunities for Pakistani companies.
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