IMF talks to unlock next $1.2bn set to begin today

Islamabad: Formal discussions between the government and an IMF delegation are slated to commence today regarding the fourth evaluation of the $7 billion Extended Fund Facility (EFF) and the third assessment of the Resilience Support Facility (RSF). Mission head Iva Petrova is expected to remain in Pakistan for nearly two weeks, concluding by the first week of October.

The objective is to determine eligibility for a $1.2 billion disbursement, comprising approximately $1 billion under the EFF and $200 million under the RSF, contingent on the successful completion of these reviews.

The government is not planning to acquire aircraft for Pakistan International Airlines (PIA), despite social media claims suggesting otherwise. Khurram Schehzad, adviser to the Finance Minister, confirmed on X that there are no plans to buy planes for a privatized PIA or provide any taxpayer-funded loans for such an endeavor. This clarification followed a meeting between Finance Minister Aurangzeb and John Jovanovich, chairman of the US Export-Import (Exim) Bank, during the 81st session of the United Nations General Assembly in New York.

During their discussions, the focus was on the Reko Diq mining project and potential financing options for procuring an aircraft for PIA, specifically Boeing's 787 Dreamliners. Schehzad emphasized that the US Exim Bank's mandate is to support its country's exports and jobs, not to provide financing for aircraft purchases. The US Exim framework allows for asset-backed aircraft financing, contingent on the aircraft, airline/lessee, and/or guarantor.

Thus, a sovereign guarantee is not a prerequisite. The finance minister's talks with US Exim were broader, encompassing aviation, refinery upgrades, and Reko Diq as part of a larger Pakistan-US economic partnership.