ISLAMABAD: The IMF has asked Pakistan to place six stringent conditions to fill the gap for making the Sovereign Wealth Fund (SWF) fully functional and amending the law to comply with the approval of Parliament.
Under these IMF conditions, the SWF will be prohibited from incurring debt, providing guarantees or collateral, lending to public or private entities, and participation in Public Private Partnership (PPP) projects.
It also bars the SWF from securing financial assets and getting any contribution from the financial institutions and State Owned Entities (SOEs). The amendments to the SWF will be made part of the law as a Structural Benchmark after the approval of the budget for 2026-27.
The government has sent six amendments to SOEs laws to Parliament for approval, to fully align them with SOE Act provisions, and is making progress on the remaining SOEs with dedicated laws by the end of August 2026.
Top official sources told The News on Monday that Islamabad assured the Fund that the fiscal safeguards are in place, including by requiring that all revenues from SWF will be provided directly to the government, while the SWF will not retain any of the funds of the public exchequer.
Any funds required for investment will be allocated by the federal government from the budgetary resources under the defined rules and regulations of the Public Finance Management (PFM) Act 2019.
The SWF, according to the sources, will be prohibited from incurring debt or borrowing in any way; providing guarantees or collateral, lending to public or private entities; participating in Public Private Partnership (PPPs); acquiring financial assets or instruments of any kind; or receiving any contributions from the central bank or SOEs.
The government, the sources said, will review the right-sizing committee, and the ten SOEs reviews have already been completed in the first phase. The government plans to complete reviews of all SOEs by the end of December 2026. The government will finalise guidelines from the Asian Development Bank, expected to be published by the end of the current month.
The review of three SOEs has been accomplished, including NHA, Pakistan Railways, and Pakistan State Oil (PSO).
The government has made progress towards privatising the 27 entities on the privatisation list. The agreement on PIA privatisation was signed and First Women’s Bank in October 2025. The first batch of Disco private sector participation has been delayed as further steps are taken to address market/investor concerns, although we are moving forward with the second wave in parallel.
The government will focus on a joint venture structure for the privatisation of the Roosevelt Hotel, with the hiring of a replacement financial adviser. Pakistan and the IMF finalised amendments to the SWF law to bring it in line with international standards. These amendments had already been submitted to Parliament.
With the enactment of these amendments, it will define the legal status and mandate of the SWF as it will be placed as SOE, as it will be managed on behalf of the government to attract foreign investment by facilitating the potential investors and mobilising investment in strategic commercial ventures to generate financial returns in line with the SWF’s Investment Mandate.
There will be a requirement that the privatisation or sale of assets and their procurement processes are conducted based on rules and policies adopted and published by the SWF’s Board that are in line with international standards and best practices, and ensure open, competitive, transparent, and non-discriminatory procedures, requiring minimum disclosure requirements for each stage of the process, including on beneficial ownership.
