Finance Minister Muhammad Aurangzeb announced that Pakistan is preparing to issue Eurobonds to secure foreign financing in the fiscal year 2025-2026, subject to the expected upgrade of the country’s credit rating to ‘B’ category by global rating agencies.
Speaking at the launch of the ‘Electronic Mortgage Registry’ by the Securities and Exchange Commission of Pakistan, Aurangzeb revealed that Pakistan is seeking $1 billion in climate financing from the International Monetary Fund (IMF) and is actively cooperating with the World Bank (WB). and the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB) for additional climate funds.
He also pointed to the possibility of launching panda bonds in the near term to tap Chinese capital markets.
Earlier, the government had aimed to raise $2 billion through Eurobonds in fiscal years 2024-25, in addition to an additional $300-500 million from panda bonds.
However, Aurangzeb clarified that the Eurobond issuance is likely to take place in FY26 rather than the current financial year.
“We will enter international markets once our rating reaches ‘B’ grade, but we may launch panda bonds beforehand,” Aurangzeb said.
He stressed that discussions with credit rating agencies, including S&P, Fitch and Moody’s, are ongoing and are expected to result in an upgrade in the next few months after the initial improvement in July-August 2024.
The Minister also provided details of Pakistan’s recent discussions with the IMF on climate financing, as an IMF delegation is scheduled to visit Pakistan next month. In addition, Pakistan held fruitful talks on climate finance with the Asian Infrastructure Investment Bank, where Aurangzeb stressed the need for Pakistan to clearly define climate project details to unlock financing.