In Islamabad, Pakistan has presented enticing investment opportunities to Saudi Arabia, promising highly profitable returns ranging from 14% to an impressive 50%. Additionally, Pakistan has assured priority in the repatriation of profits without any obstacles.
Government sources involved in these discussions revealed that the projected returns on Saudi investment are expected to allow the Kingdom to recoup its invested capital within a period of three to nine years, depending on the nature of the project. Pakistan aims to advance this investment initiative during the April 27-28 visit of Prime Minister Shehbaz Sharif, who will be accompanied by a team from the Special Investment Facilitation Council (SIFC).
During their two-day visit to Pakistan, the Saudi delegation showed keen interest in projects related to agriculture, mining, and the Diamer Basha dam. These are areas where the government has indicated maximum returns on investment. Initially eyeing a $25 billion investment, Pakistan has now adjusted its expectations to a $5 billion investment by June 2025.
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Addressing concerns raised by Saudi Arabia regarding the repatriation of profits, Pakistan assured that Saudi investors would receive priority in profit repatriation. Prime Minister Shehbaz Sharif has instructed the State Bank of Pakistan to give preference to Saudi Arabian companies in this regard.
Pakistan has allowed $694 million repatriation of profits during the first eight months of the current fiscal year, demonstrating its commitment to facilitating foreign investors. However, despite offering a liberal and attractive investment regime, Pakistan’s annual foreign direct investment has remained in the range of $1.5 billion to $2 billion. The indicated Internal Rate of Returns (IRR) range from 14% to 50%, depending on the project. These indicative figures are subject to further negotiation during technical discussions. Some notable projects pitched for Saudi investment include the Greenfield Mine Development in Khuzdar, with an impressive 50% IRR, and the establishment of a cattle farm in Punjab, offering a 34% return on investment.
Other proposed projects include corporate farming, semiconductor development, Reko Diq project shares dilution, strategic rail link development, Iron Ore Mining and Steel Mills Complex at Chiniot, a 600MW Solar Park at Kot Adu, a 1320 MW Thar Coal power project, and a transmission line project. These projects offer varying returns on investment, with payback periods ranging from three to nine years, demonstrating Pakistan’s commitment to fostering mutually beneficial partnerships with Saudi Arabia in various sectors.
