BUSINESS
Date Posted: 01-Dec-2008
Jane's Defence Weekly
Pakistan seeks Chinese loan for fighter purchase
Jon Grevatt Jane's Asia-Pacific Industry Reporter - Bangkok
Pakistan's economic crisis has prompted the government to seek soft loans from China in order to pay for initial deliveries of Chinese-designed JF-17 and J-10 fighter aircraft, chief of the Pakistan Air Force (PAF) Air Chief Marshal Tanvir Mahmood Ahmed has revealed.
Speaking through the PakistanI government's news agency on 25 November at the country's International Defence Exhibition and Seminar in Karachi, ACM Ahmed said Pakistan was planning to approach both the Chinese government and China's private sector for the loans.
Jane's estimates that the value of the loans could be in excess of USD2 billion.
ACM Ahmed revealed that between USD700 to USD800 million would be required for the initial batch of 40 to 42 JF-17s, and that "the government would also seek credit facility on easy terms and conditions" for the purchase of the J-10s.
The PAF has so far taken delivery of eight Sino-Pakistan developed JF-17 aircraft although it plans to induct up to 250 units by 2013.
The majority of these aircraft will be manufactured by the Pakistan Aeronautical Complex (PAC) at Kamra.
The eight JF-17 aircraft that have been delivered to the PAF are currently undergoing an evaluation process, added ACM Ahmed, which is expected to be complete in 2009.
Although ACM Ahmed neither specified the number of J-10s to be procured nor their cost, earlier in November he confirmed that Pakistan was planning to acquire 36 units by 2010. The value of this deal is estimated to be around USD1.5 billion.
In addition to the procurement of these Chinese aircraft, the PAF has also ordered 18 F-16 Block 50/52 aircraft - comprising 12 single-seat C variants and six two-seat D variants - and is also upgrading up to 46 of its fleet of older F-16A/B aircraft through Foreign Military Financing (FMF) funds from the United States.
Additionally, the Pakistan Navy is to receive eight former US Navy P-3C Orion maritime patrol aircraft, also through FMF funds.
On 15 November Islamabad agreed a USD7.6 billion loan from the International Monetary Fund (IMF) in order to meet what the IMF said was a "serious balance of payment difficulties".
Two days later Prime Minister Syed Yousuf Raza Gilani stated that that although the IMF loan was a "last resort" the country's Fiscal Year 2009 defence budget of USD3.8 billion would not be affected.
© 2008 Jane's Information Group