US Exim Bank Considers Financing Reko Diq Project in Pakistan

The United States is contemplating backing the Reko Diq gold and mines project in Pakistan with financial aid, marking a potentially significant investment opportunity. The Export-Import Bank of the United States is showing interest in providing funding for the project, which is estimated to require between $6 billion and $6.5 billion for completion. A substantial portion of this funding, around $3 billion to $3.5 billion, is expected to come from debt financing, with ongoing discussions involving the US Exim Bank and other creditors such as the International Finance Corporation.

The proposed loan is closely tied to the procurement of earth-moving machinery from the US and is conditional on granting preferred creditor status to the Exim Bank. Various financial institutions are currently exploring options for financing the project, with high-level talks underway between Pakistani authorities and the US Ambassador. While the US embassy has neither confirmed nor denied the potential loan, it has underscored its dedication to bolstering trade and economic relations with Pakistan.

The Reko Diq project, primarily owned by Barrick Gold, represents a significant endeavor that could help reinvigorate economic ties between the US and Pakistan. The completion of the project's feasibility study is anticipated by 2024, with production slated to commence in 2028. Additionally, Pakistan is in discussions with Saudi Arabia regarding the transfer of ownership stakes in the project currently held by federal government entities.

Prime Minister Shehbaz Sharif has proposed utilizing the Gwadar port for project operations, although Barrick Gold favors the Karachi port due to infrastructure considerations. The project, expected to span 40 years, will be carried out in two phases, boasting a total processing capacity of 80 million tonnes per annum. Pakistan is exploring avenues to grant preferred creditor status to foreign banks to streamline financing for the project and potentially attract additional creditors.

The potential financial support from the United States for the Reko Diq project in Pakistan signifies a promising development that could have far-reaching implications for both countries. As discussions progress and plans take shape, the project holds the promise of not only boosting economic cooperation but also fostering mutual growth and prosperity. Stay tuned for further updates on this evolving partnership between the US and Pakistan.