Islamabad, February 4, 2025 – A significant milestone in the ongoing partnership between Saudi Arabia and Pakistan was marked today with the signing of two major agreements, solidifying Saudi Arabia’s continued support for Pakistan’s economic growth and development. The agreements were formalized in Islamabad with the participation of Saudi Fund for Development (SFD) Chief Executive Sultan Al-Marshad and Dr. Kazim Niaz, Pakistan's Secretary for the Ministry of Economic Affairs. The event was witnessed by Pakistani Prime Minister Muhammad Shehbaz Sharif and Saudi Ambassador to Pakistan Nawaf bin Said Al-Malki.
The first agreement involves a US$1.2 billion financing package aimed at supporting Pakistan’s import of oil derivatives. This agreement is part of a broader commitment by Saudi Arabia, which has already extended approximately US$6.7 billion in oil derivative funding since 2019. The Kingdom’s financial backing is designed to alleviate Pakistan’s economic challenges by ensuring a stable supply of essential energy resources, which are critical to sustaining various sectors of the Pakistani economy, particularly its industrial and energy needs. This latest funding underscores Saudi Arabia's continued commitment to Pakistan's economic stability and growth.
In addition to the oil derivatives financing, the two parties also signed a soft loan agreement worth US$41 million to support a development project aimed at addressing Pakistan's pressing water supply challenges. This initiative will focus on providing safe drinking water to the city of Mansehra, a vital area in Pakistan’s Khyber Pakhtunkhwa province. The project will involve the installation of approximately 400 kilometers of pipelines to establish a comprehensive water distribution network, benefiting more than 150,000 residents. Furthermore, the project will include the construction of a water treatment plant with a daily capacity of around 21,000 cubic meters, which will significantly contribute to improving public health by reducing waterborne diseases and other related epidemics.
The two agreements highlight the broader scope of the SFD’s developmental work, as the Fund continues to play an instrumental role in financing projects that address critical infrastructure and public health needs across the developing world. Both agreements also underscore the deepening bilateral ties between Saudi Arabia and Pakistan, highlighting the Kingdom’s ongoing role as a key partner in supporting the sustainable development of Pakistan and other nations in need.
During the signing ceremony, Prime Minister Sharif and SFD Chief Al-Marshad held fruitful discussions on expanding cooperation between the two nations, with a particular focus on financing projects that will drive progress across key sectors of Pakistan’s economy. These include initiatives in energy, water infrastructure, and industrial development, all of which are essential for Pakistan's long-term prosperity.
The agreements also reflect the wider vision of the Saudi Fund for Development, which is committed to fostering international cooperation and solidarity to address developmental challenges in low and middle-income countries. With this continued partnership, Saudi Arabia is further cementing its role as a critical player in supporting sustainable development and enhancing the socio-economic well-being of its global partners.
As the two countries look to the future, the recent agreements are a testament to the strength of Saudi-Pakistani relations, marked by mutual respect and a shared vision for economic growth and stability. With continued collaboration, both nations are poised to make significant strides toward achieving their developmental goals and enhancing the quality of life for their citizens.
