Category: Industry

Qatar’s Minister of State for Energy Affairs, His Excellency Saad Sherida Al Kaabi, announced to become a shareholder in the private LNG terminal to be built in Port Qasim.

Qatar Energy will be a shareholder in the private sector LNG terminal to be set up at Port Qasim. The final agreement for the construction of the LNG terminal at Port Qasim will be finalized by the end of January.

Qatari Minister, Saad Sherida Al-Kaabi, will sign the agreement in Pakistan. Qatar also reiterated support for Pakistan in the LNG sector.

A video conference was held between Minister Maritime Affairs, Ali Zaidi, and Minister of State for Energy and CEO of Qatar Energy, Saad Sherida Al-Kaabi, in this regard. Secretary Petroleum, Chairman OGRA, and others were also present during the video conference.

Source: Pro Pakistani

International banks like the China Exim Bank and the International Islamic Trade Finance Corporation (ITFC) are charging up to 6.5 percent interest per annum on lending to Pakistan while loans from Italy and China Development Bank are interest-free.

According to the official record on the terms and conditions of the donors’ lendings available with ProPakistani, Japan International Cooperation Agency (JICA) and Korea International Cooperation Agency (KOICA) are charging 0.10 percent and 0.1 percent respectively on their loans to Pakistan.

The International Islamic Trade Finance Corporation (ITFC), which is a subsidiary organ of the Islamic Development Bank (IsDB), has charged five to six percent per annum on its short-term trade financing (Murabaha). The repayment schedule and maturity period of the ITFC loan was one year, and there are no commitment charges, no service charges, and no penalty if it is not paid on time.

Additionally, four to 4.25 percent per annum is being charged on Turkish lending and there are commitment charges of 0.50 percent. There is also no grace period for the Turkish loan, no service charge, and no penalty if it is not paid on time. Also, the repayment schedule and maturity period of the Turkish loan are 10 to 14 years.

The China EXIM bank is providing a government concessional loan (GCL) at two percent interest, with a 5-7 year grace period, with management fee and commitment charges of 0.20 percent each. The repayment and maturity period of the lending is 15-20 years. The China EXIM bank offers a preferential Buyer Credit at two to three percent interest with the grace period of five to seven years, with the management fee and commitment charges of 0.20 percent each. The repayment and maturity period of the lending is 15 to 20 years.

The China EXIM bank is also providing Buyer Credit at Libore+220 t0 350 basis points (bps) or fixed 6.5 percent per annum, with a grace period of five to seven years. The lending has a management fee of 0.75 percent and commitment charges of 0.50 percent. The repayment and maturity period of the lending is 15-20 years.

Asian Infrastructure & Investment Bank (AIIB) is providing loans at 0.7 percent to 1.40 percent, depending on the tenure with a grace period of 5-7 years. The loan has a management fee and commitment charges of 0.25 percent each. The repayment and maturity period of lending is eight to twenty years.

Similarly, the International Fund for Agricultural Development (IFAD) is providing blend terms loan at 1.25 percent per annum with a grace period of five years. The repayment schedule and maturity period of the lending is 25 years (including five years grace period). The service charge for the loan is 0.75 percent.

The Islamic Development Bank(IDB) is providing project financing long-term loans (Istisna and Ijara) at an interest rate of three to four per annum, with a grace period of five years. The repayment schedule and maturity period of the lending is 15 years.

The Kuwait Fund is charging 1.5 percent to 2.5 percent on the loan having a grace period of six years. The loan also has an additional charge of 0.5 percent and a special commitment of 0.5 percent. The repayment schedule (maturity period) of the loan is 20 years.

The Saudi Fund is charging a two percent interest rate with a grace period of five years. The repayment and maturity period of the lending is 20 years with a two percent penalty if it is not repaid on time.

France/AFD is providing lending on six-month Euribor plus 48-125bp, with a three to seven year grace period. The repayment and maturity period of the lending is 15-30 years. As a penalty, late repayment interest will accrue without any formal notice from the lender within the limits permitted by law on interest overdue for one year or more at the interest rate applicable to the relevant interest period (late-payment interest) plus 3.5 percent (Default Interest).

The OPEC Fund for International Development (OFID) is providing project financing long-term loans at 1.7 percent per annum with a grace period of five years. The lending has commitment charges of one percent and it has a repayment and maturity period of 15 years.

Korea is charging 0.1 percent interest on its lending with a grace period of 10 years, with no commitment charge. The repayment schedule (maturity period) of the loan is 30 years and will charge a two percent penalty per annum if not repaid on time.

The Asian Development Bank (ADB) is providing Market Based Lending (MOL) of LIBOR six month+50 basis points, with a grace period of five years and 0.15 percent commitment charges on an undisbursed amount. The repayment schedule and maturity period of the loan is 25 years (including the grace period of 5 years). The ADB will also provide Concessional OCR lending(COL) at two percent per annum with a five-year grace period and 0.15 percent commitment charges on the undisbursed amounts. The repayment schedule and maturity period of the loan is 25 years (including the grace period of five years).

The Japan International Cooperation Agency (JICA) provides concessional loans to Pakistan at 1.30 percent, with a 10-year grace period and charging 0.10 percent commitment charges. The repayment schedule (maturity period) of the loan has 30 years (including a grace period of 10 years) and 0.1 percent service charges.

The JICA is providing a STEP loan at 0.10 percent with 10 years grace period and charging 0.10 percent commitment charges. The repayment schedule (maturity period) of the loan has 40 years (including a grace period of 10 years) and 0.1 percent service charges.

The World Bank (WB) is providing IDA loans, IDA(SUF) loans, and IBRD loans. It charges 1.25 percent for IDAs, with a five-year grace period and 0 to 0.5 percent commitment charges (currently set at zero percent). The repayment schedule (maturity period) of the loan is 25 years (including a five-year grace period). Additionally, the service charge is 0.75 percent.

The WB charges LIBOR+1.65 percent (maximum) for the IDA (SUF) loan, with a five-year grace period and 0 to 0.5 percent commitment charges (currently set at zero percent). The repayment schedule (maturity period) of the loan is 25 years (including 5 years grace period). For the IBRD loan, it charges LIBOR+1.65 percent (maximum), with a five-year grace period and 0 to 0.5 percent commitment charges. The repayment schedule (maturity period) of the loan is 30 years.

The Germany-KfW lending interest rate is 0.75 percent, with a grace period of six years. The loan has commitment charges of 0.25 percent, and its maturity period is 38 years. For the penalty, if not paid on time, the KfW may increase the rate of interest on arrears to the base rate plus three percent per annum for the period beginning with the assigned due date.

Source: Pro Pakistani

An overwhelming number of investors have shown their interest in the establishment of LNG terminals/ virtual pipelines at Karachi and Gwadar Ports, and applications for at least seven LNG licenses are in various stages of considerations.

According to official documents available with ProPakistani, as of December 2021, a total of seven applications are pending for licenses or NOCs; four applications are pending with the Oil and Gas Regulatory Authority (OGRA); while three applications are pending with Port Authorities.

According to the documents, Gwadar Gasport Limited (GGPL), after entering an agreement with GITL, applied for a grant of provisional Licence on 4 March 2021 to OGRA, which was evaluated under the provisions of Rule 33 of LNG Rules 2007.

The OGRA sought the status of consent from GPA, which is required under Rule 4(3)(b) of LNG Rules 2007. As per the project detail, Gwadar International Terminal Limited (GITL) and Gwadar Gas Port(Pvt) Limited (GGPL) signed an agreement on 17 December 2020 to develop a fast track LNG import terminal at Gwadar Port and to deliver gas without using any government-owned gas infrastructure in the country.

The project envisages that it shall have a Floating Storage Unit (LNG vessel) to be berthed permanently at Berth 3 of the Port. LNG will be discharged from FSRU into ISO road tankers. ISO tankers will provide an uninterruptable supply of LNG (in the small storage tank) placed at the customer premises where vaporizers for re-gasification of LNG will be installed. However, on approaching GPA for consent, they have conveyed through the Ministry of Maritime Affairs(MoMA) not to entertain the application of GGPL till clearance from them. The Provisional License has, therefore, not been issued so far by OGRA.

Regarding NOC/Consent by GPA, the GPA and MoMA are of the view that Gwadar Port Master Plan offers a detailed plan and dedicated location for the establishment of the Gas terminal and associated onshore and offshore installation. It was suggested that a potential LNG terminal developer may submit a proposal to GPA for the establishment of such activity in a dedicated location as per the approved Gwadar Port Master Plan Instead of the utilization of General Cargo Berth.

The Metro Gas (Private) Limited applied to Oil and Gas Regulatory Authority(OGRA) for Provisional License on 26 October 2021. The company wants to establish an LNG terminal at Karachi Port. However, it has not yet been granted a license as they don’t have consent from the relevant Port Authority.

LNG Flex Limited has applied for a provincial license dated 8 October 2021. The company is interested to establish a terminal at Karachi Port and Port Qasim. A letter from Karachi Container Terminal (KICT) and a Memorandum of Understanding with Qasim International Container Terminal (QICT) have been provided. However, the Provisional License was not yet granted as NOC from KPT or Port Qasim Authority are missing, the documents reveal.

Shahzad LNG (Private) Limited applied for OGRA for a provisional License dated 26 October 2021. However, it has not yet been granted as they don’t have consent from the relevant Port Authority.

Shahzad LNG (Private) Limited has not yet defined its port of interest.

Other applications with Port Authorities, Daewoo Gas (Private) Limited (DGPL) at Gwadar Port. DGPL has approached Gwadar Port Authority (GPA). Similarly, Daewoo Gas (Private) Limited (DGPL) has acquired Global Energy Infrastructure Pakistan (GEIP), which was planning to establish an offshore Floating Storages Regasification Unit(FSRU) based LNG import terminal.

DGPL has approached Port Qasim Authority (PQA) with a proposal to establish a virtual LNG terminal at the same site.PQA doesn’t consider the GEIP Implementation Agreement valid any longer. DGPL claims that most requisite studies have already been conducted for LNG handling at this site, therefore, a terminal at this site can be established in a shorter time.

Another applicant is First Dawood Investment Bank which has approached Karachi Port Trust for establishing an LNG handling terminal at KPT. It is worth mentioning here that two LNG terminals are already operating, while licenses to another two had been issued by OGRA last year.

Source: Pro Pakistani

The Pakistani Rupee (PKR) managed to hold out against the US Dollar (USD) in the interbank market today. It hit an intra-day high of Rs. 176.55 against the latter during today’s open market session.

While redundant, it depreciated by 0.01 percent against the USD and closed at Rs. 176.68 today after gaining 24 paisas and closing at 176.67 in the interbank market on Friday, 7 January.

The rupee managed to hold its own against the USD after news that the Executive Board of the International Monetary Fund (IMF) has rescheduled the assessment of the Sixth Review and the delivery of a $1 billion tranche under the Extended Fund Facility (EFF) after a request from the Pakistani authorities.

An official statement by the Ministry of Finance explained that the government has introduced the amended Finance and SBP Autonomy bills in the National Assembly and that the IMF’s board will consider it for approval as soon as the procedural formalities are completed.

The bills must be cleared for the IMF Executive Board to resume Pakistan’s $6 billion loan program. The government hopes to pass the bills before the meeting of the IMF’s Board of Directors on 12 January. If passed, the bills will help to generate more revenues to the tune of Rs. 343 billion, and subsequently support the local exchange unit.

In light of the PKR’s interbank performance during the trading hours earlier today, the former Treasury Head of Chase Manhattan Bank, Asad Rizvi, tweeted, “Couple of IMF related news appearing in the press about [the] change of mission leader in Pakistan & removal of Pakistan’s agenda from the IMF Executive Board calendar needs official clarification. It may not help & possibility is that Financial market would react negatively”.

Conversely, the PKR reversed most of its gains against other major currencies in the interbank currency market today. It posted losses of 55 paisas against the Euro (EUR), Rs. 1.01 against the Pound Sterling (GBP), Rs. 1.08 against the Canadian Dollar (CAD), and 68 paisas against the Australian Dollar (AUD).

Conversely, it held out against both the Saudi Riyal (SAR) and the UAE Dirham (AED) in today’s interbank currency market.

Source: Pro Pakistani

The Auditor General of Pakistan (AGP) has assured the National Bank of Pakistan (NBP) of reviewing and finalizing the NBP Audit Report (2012-20), as the bank sought clarifications from the former on various statements and data included in the report.

Pointed out by the National Bank of Pakistan, the Auditor General of Pakistan has agreed to rectify the ‘factual errors’ in the Audit Report (2012-20) received to the bank from the Office of the Director-General Commercial Audit & Evaluation (South), Department of AGP, on December 28, 2021. AGP said it was a draft and, as per the process, was to be finalized after deliberations with the NBP management.

According to details, NBP held a meeting with an AGP team at the NBP Head Office, Karachi, to seek clarifications on the statements made and the data quoted in the report. The AGP team was led by Director-General (South) and comprised two other senior members.

During the meeting, the AGP team informed NBP that the said Audit Report should be construed as a compilation of their preliminary observations, which were yet to be reviewed and finalized after deliberations with NBP management.

The NBP management pointed out several factual errors in the report in actual paragraphs and the AGP officers agreed to review and amend them, wherever warranted.

In discussions with NBP senior officers, AGP expressed concerns over a premature release of the referenced confidential draft observation report circulating in the media. The AGP team said AGP was conducting an internal inquiry into the violation of protocols.

The team further revealed that as per the process, whenever the report was finalized after discussion with NBP management, it was to be available in the public domain on the AGP website.

Earlier, NBP had discovered irregularities of Rs. 235 billion in its audit from 2012-2020, which had caused a huge loss to the national exchequer. The audit was carried out by the Director-General Commercial Audit and Evaluation Karachi Wing of AGP.

Source: Pro Pakistani

Borrowing from banks by the private sector mainly to invest in businesses surged to a remarkable level of over Rs. 1 trillion in the calendar year of 2021.

According to Prime Minister Imran Khan, credit to the private sector by banks surged to over Rs. 1.138 billion in 2021 — the highest in the last 10 years.

He said, “Private sector credit offtake of Rs. 1,138 billion in the calendar year 2021, is the highest in [the] last 10 years. It shows increasing private sector confidence and investment and strong growth momentum in the economy.”

The staggering growth in the uptake of credit to the private sector shows the reopening of the businesses in the economy while the borrowing is a part of the investment either for the expansion or for the recovery of the businesses by corporations of various sizes.

The private sector made banks extensively borrowing during the period when the interest rates were relatively low whereas a majority of the companies availed specialized low markup schemes of the government in the outgoing year.

Besides, major credit disbursements were made through schemes such as Temporary Economic Relief. Credits were also recorded significantly higher in consumer segments including housing and auto loans.

The State Bank of Pakistan (SBP) usually updates the data on the basis of the financial year. Accordingly, the credit to the private sector surged to Rs. 715 billion during the period of July to December 2021 which is five times higher than the similar period of the last financial year.

The conventional banking system made the highest credit offtake of Rs. 498 billion followed by the Islamic banking divisions of conventional banks with Rs. 132 billion, and Islamic bank with Rs. 84 billion respectively.

After the revision of the policy rate to 9.75 percent, it is likely that credit to the private sector may slow down in the coming future.

Source: Pro Pakistani