Islamabad:
Pakistan has finalized a 3.5 billion dollar financing agreement with six major international financial institutions for the development of the Reko Diq historic mining project in Balutchistan – an important step for one of the largest mining companies in the country.
According to official sources, financial assembly includes commitments from the main world lenders such as the US Bank Exim, the Asian Development Bank, the International Financial Institutions, the International Development Association and the European Bank.
The agreement was signed by the project promoters, the federal government and Barrick Gold Corporation, while the final approval of the Boards of Directors of Lenders remains pending. Once authorized, the disbursement process should start within 45 to 90 days, subject to compliance with the agreed conditions.
Under the terms of the agreement, lenders will benefit from a grace period of four to five years, with reimbursements of loan spread over a 12 -year calendar. Funding will bring an interest rate to a figure, offering Pakistan a relatively favorable loan frame.
The officials said that if all the prerequisites were met in time, the first section of funds could be released within two months.
The main stakeholders in the project include Barrick Gold Corporation, the Government of Balutchistan, Oil and Gas Development Company Limited and Pakistan Petroleum Limited.
According to the agreed capital structure, Barrick Gold will keep a share of 55 percent, while Ogdcl and PPL will jointly hold 27.7 percent. The Balutchistan will keep a participation of 16.6 percent.
At a total cost estimated at around $ 7.7 billion, the Reko Diq project is expected to enter production by the end of 2028.
According to official estimates, the project could generate around $ 53 billion in total lifespan. Balutchistan is expected to receive $ 11 billion in tax revenue, $ 6 billion for its provincial part and $ 9 billion thanks to equity held by Balochistan Mineral Resources Limited.
The federal government is expected to earn about $ 11 billion in tax revenue.
