Pakistan to repay entire $3.5B UAE loan — Shocking move amid crisis

A senior cabinet minister, while briefing anchorpersons, said the political leadership has decided to return the full amount, as reported by The Express Tribune.

Of the total sum, $450 million was originally borrowed in 1996–97 for a one-year period.

According to another government official, this portion is set to be repaid next week—nearly three decades later.

While the minister confirmed that repayment plans are underway, some senior officials indicated that discussions are ongoing about converting part of the debt into investment.

Reports suggest the UAE had earlier been reluctant to roll over the loan.

However, escalating geopolitical tensions in the Middle East—particularly the ongoing conflict involving the United States, Israel, and Iran—appear to have accelerated the process, culminating in Pakistan’s decision to proceed with repayment.

The regional situation remains tense following strikes on Tehran by the US and Israel on February 28, which triggered the current phase of conflict. Iran subsequently retaliated with strikes across parts of the Middle East in the weeks that followed.