Azerbaijan has offered Pakistan over $1 billion in cash deposits to help fund the Sukkur-Hyderabad Motorway (M-6) following Pakistan’s request for infrastructure financing.
The proposal comes after Prime Minister Shehbaz Sharif’s visit, where he sought $1.8 billion—$1.2 billion for M-6 and $600 million for the Hyderabad-Karachi Motorway (M-9).
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Azerbaijan has suggested two financing options: a term deposit from its State Oil Fund with the State Bank of Pakistan (SBP) or direct funding in collaboration with the Islamic Development Bank (IDB).
Previously, Azerbaijan expressed interest in investing $2 billion in Pakistan, but a lack of concrete proposals stalled progress.
Project Costs and Feasibility
The estimated cost of the Sukkur-Hyderabad Motorway is $1.2 billion, with U.S.-based AT Kearney conducting a feasibility study. The Hyderabad-Karachi Motorway is projected at $600 million, excluding land acquisition costs.
Foreign Reserves and Loan Mechanism Debate
Currently, China, Saudi Arabia, the UAE, and Kuwait have deposited $12.7 billion in the SBP to support Pakistan’s reserves. These loans accrue interest and are annually rolled over.
However, Pakistan’s Finance Ministry has expressed concerns over accepting Azerbaijan’s cash deposit for M-6, suggesting that the National Highway Authority (NHA) should secure a direct loan instead.
Public-Private Partnership (PPP) and Bidding
The M-6 will be divided into five sections under a PPP model. The Public-Private Partnership Authority (P3A) has approved the Project Qualification Proposal, and bidding will begin after board approval.
The IDB has also shown interest in funding the project, with a final decision expected following an upcoming delegation visit to Pakistan.
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