Dar meets with top UAE leaders in bid to secure financial aid


ISLAMABAD: Finance Minister Ishaq Dar is in Abu Dhabi to seek financial support, including by selling minority shares of public listed companies at negotiated prices.

On the first day of his visit, Mr Dar met with senior management of multi-billion dollar public sector entities – such as Abu Dhabi’s state holding company ADQ, the International Holding Company (IHC) and Etisalat – to discuss investment opportunities in Pakistan.

Dar’s visit, which is expected to last until Sunday, is followed by Prime Minister Shehbaz Sharif’s visit to the United Arab Emirates shortly after his came to power in April and asked Emirati leaders for new loans of $2-3 billion.

The Prime Minister was assured that major state-owned companies and sovereign wealth funds in the UAE could choose a 10-15% stake in listed companies with an option to buy from the government of Pakistan and have their nominees on their board administration in the context of a professional business relationship. instead of direct loans.

The UAE has been rolling over $2 billion loans to Pakistan since 2019, the last being in March for another year. However, the authorities sought greater support, given Pakistan’s limited foreign exchange reserves. Mr. Dar made no comment when approached.

There has been no progress since Mr. Sharif’s visit on May 1, mainly due to the failure of the Pakistani government to pass through parliament a bill allowing the sale of stakes in state-owned companies through of agreements negotiated on a government-to-government (G2G) basis.

A similar bid from Qatar has so far failed to materialize for the same reason, except for slow movements at Qatar Gas’ proposed LNG terminal near Karachi.

An official statement said Mr. Dar met with ADQ and IHC CEOs Mohammed Al-Suwaidi and Syed Basar in Abu Dhabi and discussed investment opportunities in Pakistan. The two companies “have expressed particular interest in investing in energy, agriculture, healthcare and other sectors,” the statement said.

Similarly, a delegation from Etisalat also met with the Minister of Finance and briefed him on its ongoing operations in Pakistan and future business plans.

The company is withholding proceeds from the $800 million sale to Pakistan of the Pakistan Telecommunication Company Limited (PTCL) for 15 years. Pakistan is weighing the launch of next-generation telecommunications licenses.

The government recently introduced new legislation – the Intergovernmental Commercial Transactions Act 2022 – to the National Assembly to provide “a mechanism for conducting a commercial transaction within the framework of an intergovernmental framework agreement to promote, attract and encourage States foreigners to maintain economic and trade relations with Pakistan”.

This was to secure inflows of $2 billion to $3 billion from the United Arab Emirates through the sale of stakes in state-owned companies with the creation of debt with the possibility of buying back these shares at a time chosen by Pakistan, because the existing privatization law did not provide for negotiated G2G transactions. and the Emirates were unwilling to participate in the auction.

The UAE has already made similar investments in Egypt earlier this year and wanted to replicate this experience in Pakistan as well.

Pakistan was expecting investments from ADQ, IHC and others like Mubadala Investment Company and Abu Dhabi National Oil Company in listed entities in its oil and gas sector.

However, while the deals in Egypt were completed in a short period of time, authorities in Islamabad were unable to make any progress in more than six months. The changing of the guard at the Ministry of Finance further delayed the sequel.

Mr Dar said last week that Pakistan had secured around $13 billion in additional financial support from two traditional friends – around $9 billion from China and more than $4 billion from Saudi Arabia. – in addition to approximately $20 billion in investment guarantees.

Posted in Dawn, November 11, 2022


About Author

Comments are closed.