ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has directed the Ministry of Railways and the Finance Division to present a comprehensive execution and refinancing plan for the Reko Diq rail agreements by March 30, 2026, official sources told Business Recorder.
The Ministry of Railways informed the ECC that the Reko Diq copper-gold project, declared a ‘qualified investment’ under the Foreign Investment (Promotion and Protection) Act 2022, requires a dedicated rail link to transport concentrate from Balochistan to Port Qasim for export. The 1,350 km route via Main Line-III (ML-3) and ML-I is seen as essential for the project’s commercial viability.
To meet transport needs, the existing Nokundi–Rohri section of ML-3 must be urgently upgraded. For this purpose, Railways has signed a Rail Development Agreement and a Bridge Financing Agreement with the Reko Diq Mining Company (RDMC) for $390 million in bridge financing, with a three-year tenure at SOFR+250bps. The Government of Pakistan will act as guarantor, with repayment structured as a bullet payment at the end of the term.
The ECC noted that project income would need to be securitized, with 40% of refinancing expected through bond issuance and the remainder provided by the government. It emphasized that the Finance Division had not been given the Rail Development Agreement for review and directed Railways to share it immediately.
After detailed discussion, the ECC approved the proposal but asked the Railways and Finance Division to jointly develop a comprehensive execution, implementation, and refinancing roadmap. The plan will be presented to the ECC by March 2026 for final consideration.
Story by Mushtaq Ghumman
