Cabinet set to approve Saudi credit facility for urea import
November 28, 2012
The federal cabinet is to accord approval to the signing of an export credit facility for the import of urea from Saudi Arabia. Officials said that in March this year, the Finance Division had informed the Economic Affairs Division (EAD) that $588 million will be required to import 1.2 million tons of urea during 2012-2013.
The EAD was accordingly asked to approach the Saudi Fund for Development (SFD) for financing of $100 million for import of urea. The sources said Saudi Arabia, through SFD, had been extending credit facility to Pakistan for import of urea in the past as well. Under this facility, urea worth $200 million was imported in 2009 and also in 2011 for an amount of $100 million.
On the request of EAD, the SFD agreed to consider providing $100 million for import of urea and accordingly sent a draft financing agreement for government approval. The draft was circulated to all stakeholders namely, the Ministry of Finance, Ministry of Commerce, Ministry of Industries, State Bank of Pakistan and Trading Corporation of Pakistan for views and comments. All of them have consented to the draft agreement. The Law and Justice Division has also vetted the draft agreement from legal point of view. EAD, in its summary, said that in view of the shortage of urea in the country for Rabi crop, it is important that the government may sign this facility as early as possible to ensure its timely arrival.