Pakistan is weighing fresh Pakistan debt financing options with advisory firm Lazard and several international banks, aiming to stretch when loans come due and ease near-term repayment pressure. Finance Minister Senator Muhammad Aurangzeb held the talks on the sidelines of the IMF–World Bank Annual Meetings 2026 in Bangkok, Thailand.
The International Monetary Fund (IMF)—the global lender that supports countries under economic programmes—and partner institutions heard Islamabad’s pitch for longer-term instruments. Officials said the goal is to replace expensive short-term borrowing with longer-dated financing, reduce repayment concentrations and keep access to international capital markets, without raising the overall external debt burden.
Lazard and banks discuss new instruments
In a meeting with a Lazard delegation, the minister was briefed on alternative tools such as guaranteed Sukuk (Islamic bonds), sustainability-linked loans and debt swaps. He welcomed the ideas and pointed to restored market access and plans for further issuance, including Panda bonds—yuan-denominated bonds typically sold in China.
Both sides also discussed sovereign rating advisory work and steps that could support a move toward the BB credit-rating category. They agreed to keep coordinating through Pakistan’s Debt Management Office and the State Bank of Pakistan (SBP), the country’s central bank. Lazard offered to prepare a short note with its recommendations.
Separately, engagements with Sharjah Islamic Bank, Abu Dhabi Commercial Bank, Ajman Bank and J.P. Morgan covered financing needs, investment prospects and the economic outlook. Sharjah Islamic Bank reaffirmed support and readiness to take part in a Sukuk. Discussions also touched on rupee-denominated dollar-settled instruments, further Panda Bond issuance, possible Eurobond tokenisation, MIGA-backed financing, ITFC and IFC-linked transactions, and potential loan conversions.
What the government says it wants
Muhammad Aurangzeb highlighted progress he linked to the IMF programme: fiscal consolidation, stronger foreign exchange reserves, improved sovereign credit ratings and renewed capital-market access. He reiterated commitment to macroeconomic stability, structural reforms and export-led growth, and stressed fiscal discipline and the medium-term financing strategy so Pakistan can use favourable market windows.
With J.P. Morgan, the minister discussed investor engagement, private-placement underwriting, credit enhancement, secured financing and potential debt swaps, alongside the BB-rating ambition. Investment themes ranged from refinery upgrades and power-distribution privatisation to airport outsourcing, electricity transmission, the Main Line-I (ML-1) railway project, data centres and digital finance—where he underlined competitive electricity pricing and a clear regulatory framework. Expanding credit for businesses, small and medium-sized enterprises (SMEs) and agriculture was also on the table.
IMF, UNDP and climate-linked options
With Jihad Azour, director of the IMF’s Middle East and Central Asia Department, the minister reviewed economic performance and reforms on revenue, inflation, growth and the current account. He cited stronger reserves, lower forward foreign-exchange liabilities, longer debt maturities and reduced external repayment needs, and reaffirmed aims to keep primary budget surpluses, cut public debt and pursue growth-friendly tax reforms while protecting social spending. Both sides stressed sustained reforms and clear communication, linking economic stability to national security.
A meeting with Alexander De Croo, UNDP administrator and UN under-secretary-general, covered development financing, climate resilience and jobs. Options included converting frameworks into bankable projects, blended finance, public-private partnerships, biodiversity financing, and possible debt-for-nature and debt-for-climate swaps, plus climate risk insurance such as Global Shield and parametric cover.
Timeline: what has happened so far
- 16 October 2026: Aurangzeb meets Lazard in Bangkok on guaranteed Sukuk, sustainability-linked loans, debt swaps and rating-related advisory work; follow-up is to run via the Debt Management Office and the SBP.
- 17 October 2026: Talks with Sharjah Islamic Bank, ADCB, Ajman Bank and J.P. Morgan cover Sukuk, Panda bonds, secured financing and longer maturities.
- 17 October 2026: Meeting with UNDP’s Alexander De Croo explores development and climate financing, including possible debt-for-nature and debt-for-climate swaps.
- 17 October 2026: Meeting with the IMF’s Jihad Azour reviews reform progress, reserves and repayment pressures alongside energy and food-security preparedness.
Aasan alfaaz mein
Hakumat Bangkok mein naye qarzay aur bond ke tareeqay dekh rahi hai taake wapasgi thori der baad ho. Short-term mehnga qarza kam karke lambi muddat ka financing lene ki baat ho rahi hai. Is se kul bahiri qarza barhane ke baghair adaygi ka dabao kam karne ki koshish hai. Aam logon ke liye seedha faida tab nazar aayega jab yeh deals final hon aur budget par pressure kam ho.
