Pakistan is preparing to raise $500 million through a second Panda bond issuance in China, exploring alternatives to guarantees from the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB). The proposed sale is expected in April or May 2027 as the government seeks to diversify financing sources and address gaps in the refinancing of Chinese commercial loans.
According to officials cited by The News, the Ministry of Finance has begun preparations for the proposed bond and is considering involving Chinese credit-enhancement companies to help attract investors.
Pakistan Seeks Alternative Financing Support
Pakistan’s plan comes after it repaid approximately $1.3 billion in Chinese commercial loans, expecting the amount to be refinanced within a few months. Although some refinancing has been secured, the full amount has not yet been replenished.
The government is therefore exploring options to raise funds through China’s domestic capital market. Using Chinese credit-enhancement institutions could help support the proposed issuance without relying on guarantees from international development banks.
Officials say Pakistan gained valuable experience from its first Panda bond sale, which required extensive preparation to meet the requirements of China’s capital market.
Pakistan’s First Panda Bond Raised $258 Million
Pakistan entered China’s renminbi-denominated bond market in May 2026 with its first Panda bond, worth 1.75 billion yuan, equivalent to approximately $258 million.
The inaugural issuance received support from the ADB and AIIB, which provided partial guarantees to help Pakistan access the market and strengthen investor confidence. The bond proceeds were designated for sustainable and green infrastructure projects.
These projects include improvements in water governance, energy reliability and efficiency, and healthcare capacity. The transaction was also part of Pakistan’s broader strategy to diversify its sources of external financing.
Second Bond Could Take Total Proceeds Above $750 Million
The proposed second issuance aims to raise another $500 million. If completed as planned, Pakistan’s total proceeds from its first two Panda bond sales would reach approximately $758 million.
The government is considering launching the transaction during the second half of the current fiscal year, with April or May 2027 identified as the expected window.
However, the second bond remains a proposal under preparation. Its final structure, the role of Chinese credit-enhancement companies and the terms offered to investors have not yet been confirmed.
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What Is a Panda Bond?
A Panda bond is a bond issued by a foreign borrower in China’s domestic market and denominated in Chinese yuan, also known as renminbi.
For Pakistan, issuing these bonds could open another channel for raising funds, reduce reliance on a limited number of financing sources and support selected development projects. The cost and success of future issuances will depend on investor demand, credit support and the terms available in the Chinese market.
Pakistan’s proposed $500 million sale represents a further step in its efforts to expand access to international capital markets while addressing its external financing needs.
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