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3d ago

Pakistan to Swap $1 Billion UAE Loan for Fauji Foundation Stake

The planned loan-to-equity deal would remove a major liability from Pakistan’s books as officials also cite a UAE pledge to roll over a further $2 billion.

Pakistan’s Foreign Minister and Deputy Prime Minister Ishaq Dar | Photo: X/@DPM_PK
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Overview

  • Deputy Prime Minister and Finance Minister Ishaq Dar said the UAE would acquire shares in the army-linked Fauji Foundation worth about $1 billion, subject to final agreements.
  • Dar said the transaction is targeted for completion by 31 March 2026, and the loan conversion would extinguish roughly $1 billion in liabilities if finalized.
  • Officials described the structure as a loan-to-equity swap led by a committee, with the arrangement announced but still under negotiation and due diligence.
  • Pakistani officials also reported a separate pledge from Abu Dhabi to roll over an additional $2 billion in loans following meetings with UAE President Sheikh Mohammed bin Zayed Al Nahyan.
  • The move comes as Islamabad manages heavy external and public debt under IMF programs, with recent steps including the PIA privatization and continued reliance on support from the UAE, Saudi Arabia, and China.