ISLAMABAD: The government will go ahead with its plan to issue over $500 million sukuk (Islamic bonds) later this month despite OGDCL debacle.

Finance Minister Ishaq Dar told journalists on Monday that the government would first hold roadshows and then float sukuk in the Middle East and Europe between November 21 and 24.

Pakistan had to scrap selling 10 per cent shares of the country’s largest petroleum producer – Oil and Gas Development Company Limited – last week to international investors due to massive undersubscription following the divestment was challenged in courts and opposed by the major political parties.

Dar said building foreign exchange reserves to $15 billion by end-December was important to qualify for concessionary financial support for development from the World Bank under IBRD (International Bank for Reconstruction and Development).

Sale of OGDCL shares was one of the three major sources including the IMF tranches and sukuk the government was expecting to boost foreign exchange reserves from $13.4bn now to $15bn.

“Perhaps, the government would like to increase the size of the sukuk from $500 million to $1bn to make up for the gap created by failed OGDCL transaction,” said an official requesting anonymity.

Responding to a question, Dar said the twin sit-ins in the capital had caused irreparable loss to the country and the investment confidence.

“After visiting Washington and Beijing recently, I have noticed that confidence of the people and investors had been shaken in Pakistan,” said Dar.

He said the foreigners had taken it with surprise that such a situation could also arise in Pakistan where a few thousand people could hold the federal capital hostage after 50,000 international observers declared 2013 elections as one of the most free, fair and transparent elections.

As a consequence, the government had to cancel OGDCL transaction because “we don’t have any desperation” and could afford to delay it. Pakistan, he said, was a solid country having strong footing and would remain so.

He said the government was able to combine two reviews with the IMF and despite colossal economic loss caused by the protests, the country’s confidence was returning as stock market was booming and rupee was again gaining strength.

He said the IMF tranches and sukuk would further improve the country’s image and build its economy.

Published in Dawn, November 11th, 2014