ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet on Monday approved more than Rs255 billion in subsidies under three separate incentive schemes to boost the country’s exports, which have remained struggling at $30bn per annum for years despite rising imports.
The meeting, presided over by Finance Minister Muhammad Aurangzeb, also approved a special domestic gas supply tariff of Rs2,000 per million British thermal units (mmBtu) for RLNG-based power plants, instead of over Rs3,500 per mmBtu RLNG imports price disrupted by the US-Iran war.
A summary for three dedicated export finance subsidy schemes for enhancing exports was moved by the finance ministry. These include an enhanced EXIM-administered Export Finance Scheme (E-EFS), the launch of a new Long-Term Export Growth Financing Facility (LTEGFF), and a performance-based rebate on incremental exports.
Under the E-EFS, the government will provide exporters with working capital loans for six months at an interest rate of 8.5 per cent and pick the remaining 5pc interest cost, involving a subsidy of Rs58bn to be paid from the federal budget during the current fiscal year.
Also fixes lower gas tariff for RLNG-based plants
The ECC also enhanced a 50pc increase in the scheme’s portfolio to Rs1.5 trillion from the existing Rs1tr.
The second, new scheme, called the LTEGFF, will provide loans to exporters at a negligible interest rate of 2pc for the first two years and a fixed 5pc for the subsequent eight years.
The scheme has been designed to provide long-term financing for the establishment of new export-oriented projects or for the balancing, modernisation and replacement of existing projects.
The scheme is targeted to provide about Rs350bn and entails a subsidy of around Rs195bn, arising from the government’s decision to pick up to 11.5pc interest cost. For FY27, the subsidy has been estimated at Rs25bn.
The finance ministry reported to the ECC that the existing E-LTFF, which carries variable interest rates, did not attract the business community largely because of interest rate risk.
It approved a new performance-based rebate scheme on incremental exports with effect from July 1 at an estimated annual cost of Rs15bn. Exporters delivering annual export growth of up to 10pc over the preceding year’s exports will be eligible for a rebate equivalent to 1pc of the incremental export value. Those recording export growth of over 10pc over the preceding year will qualify for a rebate of 2pc of the incremental export value.
It also cleared a summary proposing a tariff of Rs2,000 per mmBtu for indigenous gas supplies to RLNG-based power plants on SNGPL network during April, May and June, instead of Rs3,500. This helped contain power tariffs during LNG shortages without negatively affecting the revenues of SNGPL.
It also authorised a request for a supplementary grant of Rs4bn to meet arbitration expenses relating to multiple international proceedings initiated by independent power producers and major utility shareholders.
Published in Dawn, July 28th, 2026