- Defence agreement and Saudi funding support Pakistan’s reserves, IMF commitments, and sustainable food security initiative
Pakistan considers Saudi Arabia as one of its closest strategic partners and economic allies in the region. The Kingdom has extended significant support to Pakistan during government’s prolonged economic challenges in recent years, which includes external financing and assistance with International Monetary Fund (IMF) loan programs. Saudi Arabia is also the largest source of foreign remittances for Pakistan, where over 2.5 million expatriates reside. These remittances are crucial for keeping Pakistan’s fragile, $350 billion economy afloat as it faces external pressures and macroeconomic challenges.
Saudi Arabia has expressed significant interest in investing in Pakistan’s key sectors like mining, agriculture, food security, energy and infrastructure. Some of the recent key investments and initiatives are:
- Saudi investors are establishing an integrated medical complex and have started five investment projects in sectors like healthcare and energy.
- 30 MoUs have been signed to facilitate employment for skilled Pakistani workers in Saudi Arabia, with plans to enhance training to meet Saudi labor market demands.
- Pakistan is actively seeking Saudi investment to modernize its railway network, proposing a $2.5 billion upgrade for the Multan-Lahore section via a build-operate-transfer model.
Energy
Aramco and Wafi Energy, Saudi Arabia-based petroleum companies, have announced significant investments in Pakistan’s petroleum industry. Aramco, one of the world’s largest integrated energy and chemicals companies, completed the acquisition of a 40% stake in Gas & Oil Pakistan Ltd. (GO) in May 2024. Wafi Energy, formerly Shell Pakistan Limited, has acquired a majority stake in the company, marking a significant investment in Pakistan’s energy sector.
Aramco and Wafi Energy will compete with Pakistani oil marketing companies (OMCs) by introducing advanced technology and expertise in the fuel retail market, enhancing service standards and product quality. This competition is expected to benefit consumers.
In the future, the strategic investments by Aramco and Wafi Energy will significantly strengthen Pakistan’s economic growth. Aramco’s stake in Gas & Oil Pakistan Ltd. (GO) will boost the energy sector and attract foreign direct investment.
Agriculture and food security
KSA has launched the third phase of Saudi Food Security Support Project in Pakistan. The Saudi-backed initiative is delivering essential food supplies to thousands of households across Pakistan, providing much-needed relief amid climate-related challenges. The government has also invited Saudi investors to explore opportunities in agri-based projects, particularly in high-yield zones, and called for institutional cooperation between universities and research centers in both countries. They have also proposed joint work on desert agriculture, seed development and water efficiency, describing them as high-impact areas for regional collaboration.
Pakistan’s has shared with KSA its long-term vision for achieving sustainable food security through investment in agricultural research, innovation and modernized farming systems. The government has proposed deeper collaboration between Pakistan and Saudi Arabia in key areas such as joint agricultural research, technological exchange and investment in food processing and storage infrastructure.
Mining
In early 2025, reports suggested Saudi Arabia’s Manara Minerals Investment Co. was interested in acquiring shares in the project. The investment is seen as part of a broader strategy to deepen economic ties between Pakistan and Saudi Arabia. Earlier talks for Saudi Arabian financing to fund the project failed in August 2025. In the wake of these failed talks, the Reko Diq project has since secured new financing commitments from international lenders like the World Bank, Asian Development Bank, and the US Export-Import Bank. Despite the new funding, Saudi Arabia remains a significant partner of interest for the Pakistani government, with efforts continuing to finalize a deal. Saudi Arabia’s Public Investment Fund (PIF) (which is linked to its sovereign wealth) is still in direct negotiations with the Pakistani government regarding investment in the project.
The investments coincide with a “Strategic Mutual Defense Agreement” signed on September 17, 2025, which states that any aggression against one country will be considered an aggression against both. Saudi Arabia’s investments are considered vital for Pakistan’s economic stability, helping to shore up foreign reserves and meet IMF requirements. Pakistan is navigating regional challenges and the involvement of multiple global powers, including China and the US.