According to Bloomberg, corporations from oil-rich Kuwait are going to start numerous $750 million projects in Pakistan, providing a big boost to the country’s cash-strapped economy.
According to the article, Enertech Holding Co. of the Kuwait Investment Authority and Pakistan Kuwait Investment Company (PKIC) have joined to investigate potential in Pakistan. According to Mohammad Al Fares, chairman of Pakistan Kuwait Investment Co., they have sought for a digital bank licence and have suggested developing a hydrogen plant and two smart towns.
The two corporations are already working on a $200 million water pipeline, according to the story.
Pakistan, whose foreign exchange reserves have plummeted in recent months due to imports and debt payments, has been eager to attract foreign direct investment.
Pakistan received $1.285 billion in FDI from July through March of FY22, compared to $1.311 billion in the same month of the previous fiscal year (FY21), a decrease of $26 million.
Meanwhile, the country’s total liquid foreign exchange reserves declined further, falling below $17 billion. The State Bank of Pakistan’s reserves have likewise dropped to under $11 billion.
Islamabad is in talks with the International Monetary Fund (IMF) to resurrect the $6 billion Extended Fund Facility (EFF) programme in order to secure funding. The nation has also requested a one-year extension of the program’s term and a $2 billion boost in funds.
Pakistan would get more than $900 million if the IMF assessment is approved.
Meanwhile, Prime Minister Shehbaz Sharif travelled to Saudi Arabia on his first overseas trip as Pakistan’s leader to negotiate extending the conditions of a $3 billion loan to support the country’s ailing economy.
Pakistan has had a lengthy relationship with the Gulf States, which has provided financial assistance to successive governments.