A Saudi state-owned lending agency has agreed to issue loans to the tune of US$183mn for Pakistan’s industrial sectors.

The finance comes from the Saudi Fund for Development, which will lend US$135mn for the import of urea fertiliser from the Kingdom and a further US$57.8mn for the construction of a hydropower plant.

It comes in addition to a previous financing package of US$40mn for the civil works of the same hydro project – the 106MW Golen Goi facility on the River Mastuj.

The agreements were reached during a meeting of high-level officials from both countries in Pakistan, during which additional ways of bolstering bilateral trade were discussed.

The pair currently enjoy a trade relationship worth around US$4bn with Pakistan for many years being a recipient of defence products from Saudi Arabia.

Saudi Arabia was a major supporter of Pakistan during the Kashmir conflict, when it warred with India over the disputed border territory. Not only was Saudi Arabia the only country to have been informed of Pakistan’s intention to test nuclear weapons, it also agreed to provide free oil to help the country cope with the impending economic sanctions that would come as a result.

Other areas to have been discussed at the latest Karachi summit were mutual co-operation in agro-food, including rice, red meat, dates, petrochemical, training, plastics, and energy projects, including solar energy.