Pakistan seeks $27bn debt relief to secure IMF bailout

Cash-strapped Pakistan has sought the re-profiling of more than $27 billion in debt and liabilities with China and two other friendly nations to secure a bailout package from the IMF, according to a media report on Monday.

The Washington-based International Monetary Fund last month announced that it signed a staff-level agreement with Pakistan to provide a $7 billion loan which would be disbursed for 37 months. However, it attached stringent conditions with it, requiring Pakistan prior action before the fund's board accords final approval for the loan.

Finance Minister Muhammad Aurangzeb after returning from Beijing told the media on Sunday that talks have been going on with China, Saudi Arabia and the UAE for a re-profiling of $27 billion. Aurangzeb said Pakistan had already asked the friendly bilateral trio of lenders to roll over its more than $12 billion annual debt portfolio by three to five years to secure the IMF board's approval, which is expected next month.

This is on top of Islamabad's request to Beijing to convert imported coal-based projects to local coal and re-profile more than $15 billion in energy sector liabilities to create fiscal space amid difficulties in timely repayments.