Pakistan and UAE are moving closer to a major financial transaction that could remove a $1 billion external liability from Pakistan’s balance sheet.
Foreign Minister Ishaq Dar said UAE-based entities are expected to acquire shares in companies owned by the Fauji Foundation, which would convert the liability into direct investment.
Speaking to the media during an official UAE visit to Pakistan, Dar explained that the $1 billion amount had previously been rolled over by the UAE.
Once the share acquisition is completed, the amount will no longer be treated as external debt. He said detailed meetings had been held under his supervision, with the Fauji Foundation group leading the process.
The foreign minister said the government aims to complete the transaction by March 31. As part of the deal, shares of several Fauji Foundation group companies will be sold to UAE investors.
Dar also provided background on Pakistan’s recent external financing needs. He said the country had to secure around $12 billion in foreign support to stabilise its foreign exchange reserves under IMF requirements. This included support from Saudi Arabia, $4 billion from China, and $3 billion from the UAE.
He added that talks are also ongoing with the UAE regarding another $2 billion amount. The government wants to move away from rollovers and instead convert liabilities into long-term investments. Prime Minister Shehbaz Sharif also raised this issue with UAE leadership, who responded positively.
Discussions also included investment matters related to Etisalat, with further talks expected. Dar said Pakistan’s active diplomacy has helped rebuild international confidence and improve relations after years of limited engagement.
He expressed hope that continued cooperation with partner countries would further strengthen Pakistan’s economic position and reduce external financial pressure.