Pakistan paid Rs490 billion in interest on domestic and foreign borrowing during the first nine months of the last fiscal year, according to documents submitted to the National Assembly. The figures point to a growing strain that debt servicing is placing on the national treasury.
The Ministry of Finance submitted the papers, which also set out how foreign loans have been spent and how major development schemes funded through overseas borrowing are progressing.
Foreign loans directed to budget support and energy
About $11.42 billion of foreign loans went toward balance of payments support and cash assistance, the documents show. Another $3.09 billion was used for energy projects, while $1.69 billion was earmarked for flood rehabilitation.
The ministry said 14 major national projects are being financed through external borrowing, and seven of them fall under the Ministry of Energy. Oil financing is also covered: the $3.38 billion Saudi Oil Facility programme and a $2 billion ITFC oil and LNG financing arrangement were backed by borrowed funds.
Power and infrastructure schemes relying on overseas funding
Several energy and infrastructure schemes depend on foreign loans. These include $247.6 million for the Jamshoro power project, $475 million for the Tarbela extension, $225 million for the Dasu hydropower project and $93.22 million for the Mohmand Dam.
The Transmission Modernisation Project carries an external loan of $192.87 million. The Sukkur-Multan Motorway and the Karachi Mobility Project are also being supported through foreign borrowing.
Resilience, education and climate projects drawing external finance
The documents further note that a $1.5 billion Building Resilience programme is among the initiatives backed by external financing. Projects in higher education, climate change and natural disaster management are also funded by foreign loans.
Overall, the Ministry of Finance put the combined value of the 14 major externally financed projects at $11.86 billion.
