IFC to Provide $400 Million Loan for Reko Diq Mine

The International Finance Corporation (IFC) will offer a $400 million subordinated loan for Pakistan’s Reko Diq copper-gold mining project, according to a recent IFC statement. This follows an initial pledge of $300 million in April, bringing the IFC’s total funding commitment to $700 million for the endeavor.

The estimated overall expenditure for the mine is $6.6 billion, which will be secured through a combination of debt and equity from a group of financial institutions.

The disclosure specified that the project, with a total cost of $6.6 billion, will leverage both debt and equity financing. Additional parallel lenders are anticipated to contribute the remaining debt required.

Subordinated debt, such as this loan, is generally repaid after other senior loans and serves to mitigate risk, thereby encouraging further investment from other lenders.

Other financial backers, including the U.S. EXIM Bank, the Asian Development Bank, Export Development Canada, and Japan’s JBIC, are also anticipated to participate in the financing arrangement, according to project director Tim Cribb in April. The closure of term sheets is projected for early in the third quarter.

Earlier in the year, IFC chief Makhtar Diop stated that the institution was increasing its focus on Pakistan, particularly in the areas of infrastructure, energy, and natural resources.

Located in Balochistan, Reko Diq is recognized as one of the world’s most substantial undeveloped copper-gold reserves. Barrick Gold is developing the site, holding a 50% stake, with the remaining ownership divided between the Pakistani federal and provincial governments.

Production is slated to commence in 2028. Barrick estimates that the mine will yield up to $74 billion in free cash flow over its projected 37-year operational lifespan.