Key Takeaways
- Government not providing financing or sovereign guarantees for PIA’s new aircraft.
- Discussions with US Exim Bank for potential financing support in various sectors.
- PIA interested in Boeing 787 Dreamliners for modernization.
Adviser to the Finance Minister Khurram Schehzad has clarified that the government is not financing the procurement of new Boeing aircraft for Pakistan International Airlines (PIA), which was privatized in December last year. Schehzad stated that no government loan or sovereign guarantee has been announced for the airline.
In a post on X, Schehzad emphasized that the discussions with the US Export-Import (Exim) Bank during the 81st session of the United Nations General Assembly in New York were not limited to PIA. The discussions also included potential financing opportunities for the Reko Diq mining project and refinery upgrades, in addition to the possibility of procuring Boeing aircraft.
Schehzad explained that the US Exim Bank’s mandate is to support US exports and jobs, and that Boeing aircraft are US exports. The bank provides financing support to foreign purchasers of US-manufactured aircraft, including airlines, through established financing structures. This support can include asset-backed aircraft financing, where the aircraft itself can be used as security.
The government’s role, according to Schehzad, is to facilitate Pakistani businesses’ access to international financing, technology, and suppliers, while promoting investment and commercial opportunities. The government is deliberately reducing its role in commercial activity, pursuing privatization, and creating greater space for private capital.
Schehzad reiterated that claims about a ‘public loan’ or ‘hidden subsidy’ should not be presented as facts when no such arrangement has been announced. Any financing, he added, would be arranged according to its commercial terms and financial structure.
PIA has expressed interest in Boeing’s 787 Dreamliners for modernization, and the finance minister shared PIA’s interest with the US Exim Bank during the meeting. The discussions focused on a financing package covering aircraft and engines.
Schehzad clarified that the government is not buying aircraft for a privatised PIA and that the financing would be structured on its own commercial terms. He emphasized that the government’s role is to open doors and facilitate, while businesses invest and operate.
The government is committed to creating a conducive environment for businesses and facilitating investment instead of running businesses itself. Schehzad stated that the distinction between government facilitation and private sector investment is straightforward: the government facilitates, businesses invest and operate, and financing is structured on its own commercial terms.
The government is neither buying aircraft for a privatised PIA, nor has it announced any sovereign guarantee of taxpayer-funded loan for doing so.
Khurram Schehzad, Adviser to the Finance Minister
