International Financing Institutions agree to provide over $5.5 billion in funding to Reko Diq project
The Reko Diq Mining Company (RDMC), a special-purpose vehicle formed by Barrick Gold Corporation (50% ownership) and the governments of Pakistan and Balochistan (50%), has attracted unprecedented interest from global financial institutions. This interest has culminated in over $5.5 billion in financing commitments for the $7.48 billion project, which is expected to commence construction in December 2025.
The RDMC has expressed readiness to provide bridge financing of $400 million for the construction of railway infrastructure. Following financial closure, expected by the end of September or early October 2025, RDMC is set to begin contractor mobilisation, equipment procurement, and site development.
The Asian Development Bank (ADB) has approved $300 million in financing for the RDMC project, marking its first mining-sector investment in over four decades. The ADB has also extended a $110 million credit guarantee to the Government of Balochistan to enhance its equity position and manage project-related risks.
Denmark's export credit agency has offered guarantees to support commercial bank financing or equipment procurement for the project. The International Finance Corporation (IFC) has pledged $700 million to the RDMC project, including a $400 million subordinated loan backed solely by the balance sheets of Pakistani SOEs, without any sovereign guarantees.
The US Export-Import Bank has committed approximately $1 billion, and the Japan Bank for International Cooperation has agreed to provide $300 million. These commitments, along with others, exceed the actual requirement of $3.74 billion for the Reko Diq project.
The project, located in Balochistan's Chagai district, is being developed under a 50:50 debt-to-equity model. Balochistan holds a 25% stake in the RDMC project, which includes a 10% free-carried interest and a 15% fully funded share guaranteed by the federal government.
The construction of the RDMC project is expected to commence commercial operations by 2028. Over its 37-year operational life, the project is projected to generate $74 billion in free cash flows. Despite the revised total project valuation of $7.48 billion, reflecting inflation, commodity price volatility, and contingency planning by lenders, the project is still expected to be executed within the original cost estimate of $6.765 billion, due to tight cost controls and operational efficiencies.
A senior official involved in the financing process described the RDMC project as a "transformational economic engine for Pakistan". With these significant financing commitments, the Reko Diq Mining Project is poised to make a substantial impact on Pakistan's economy. Only the most favourable loan terms will be selected to ensure the project's success.
Read also:
- Trade Disputes Escalate: Trump Imposes Tariffs, India Retaliates; threatened boycott ranges from McDonald's, Coca-Cola to iPhones
- Li Auto faces scrutiny after crash test involving i8 model and a truck manufacturer sparks controversy
- Celebrated Title: Cheesemakers Blessed Upon
- Construction and renovation projects in Cham county granted €24.8 million focus on energy efficiency
