ISLAMABAD: Pakistan and Saudi Arabia on Tuesday signed three agreements under which the Saudi Fund for Development will provide $380 million for debt rescheduling, hydro-power project and the import of urea fertiliser.

Two loan agreements pertained to the pledge made by Saudi Arabia during the donors’ conference in Tokyo on the backdrop of the Friends of Democratic Pakistan (FoDP) meeting, in which the kingdom had pledged $700 million.

The first agreement is about a time deposit of $200 million by Saudi Arabia with the SBP. The loan said to be used for debt rescheduling by the Pakistan government, carries an interest rate of three months Libor and its repayment will be made in eight years including a grace period of three years.

This loan agreement was signed by the Saudi Fund Managing Director Yousef Ibrahim Al-Bassam and SBP Deputy Governor Yaseen Anwar.

The second agreement from the pledged amount was the export credit of $100 million. Pakistan will use this loan for the import of urea fertiliser from Saudi Arabia. To execute this agreement, the Trading Corporation of Pakistan and the Saudi Arabian Basic Industries Corporation (SABIC) will sign a separate agreement.

This loan carries an interest rate of one year’s Libor plus 85 basic points, and will be repayable after a period of two years. The loan agreement was signed by the head of Saudi Fund and Secretary Economic Affairs Division Sibtain Fazal Halim.

The third agreement related to the financing of Neelum-Jhelum hydropower project, which is a regular on-going assistance from Saudi Arabia. The Saudi fund will provide a soft loan of $80 million for the project. The project is co-financed by Saudi Arabia, Abu Dhabi, Kuwait, Islamic Development Bank, Opec Fund and Chinese Exim Bank.

The loan carries an interest rate of two per cent and is repayable in 20 years.

After the signing ceremony Yousef Ibrahim Al-Bassam called on the Minister of State for Finance and Economic Affairs Hina Rabbani Khar. Prior to the meeting Ms Khar in a brief chat with newsmen said that the agreements signed today will give further impetus to the economic relations between Pakistan and Saudi Arabia.

The Saudi Fund will also sign a memorandum of understanding with the UN Humanitarian Coordinator in Pakistan for a grant of $100 million to support the operation for the assistance of IDPs in the Northern Region.