Pakistan seeks Chinese financing for $1.8B Karakoram Highway project and $1.3B loan refinancing

Pakistan is preparing to ask China to permit qualified local construction firms to compete for the $1.8 billion Karakoram Highway rebuild under the China‑Pakistan Economic Corridor. Planning Minister Ahsan Iqbal said the government will seek amendments to the current framework that limits bidding to three Chinese companies, arguing that Pakistani contractors could cut costs by up to 35% and speed up work needed before the Diamer‑Bhasha Dam submerges part of the existing road in 2028. The project, estimated at Rs 502 billion, may also be self‑financed if loan negotiations stall.

At the same time, Pakistan has formally requested China to accelerate the refinancing of $1.3 billion in commercial loans. The move follows July repayments of $2.2 billion in external debt, including $1.3 billion to Chinese lenders. Officials expect the funds to be released by the end of August, bolstering foreign‑exchange reserves and easing external financing pressures. State Bank of Pakistan Governor Jameel Ahmad highlighted a broader rollover of about $12 billion in deposits and loans from China and Saudi Arabia to meet the country’s financing needs.