Government Says It Won't Fund PIA's Boeing Purchases, as US EXIM Talks Widen to Reko Diq

Pakistan's government moved on September 27, 2026, to clarify that it is not financing new aircraft for a privatised Pakistan International Airlines, a day after reports of Finance Minister Muhammad Aurangzeb's meeting with the US Export-Import Bank in New York suggested Islamabad was pursuing American support for a Boeing fleet expansion.

What Aurangzeb actually discussed

Aurangzeb met EXIM Bank chairman John Jovanovich to explore financing options for PIA's aircraft needs, which include an interest in Boeing 787 Dreamliners and spare parts to return grounded Boeing 777s to service. He also raised potential US EXIM support for upgrades at Pakistani oil refineries and for the Reko Diq copper-gold project in Balochistan, where Barrick Mining Corporation is developing one of the world's largest untapped copper deposits alongside the Pakistani government and Balochistan's provincial government.

None of this amounted to a signed deal. Adviser to the finance minister Khurram Schehzad said the discussions were exploratory, aimed at examining what financing structures might be available rather than committing to a specific purchase or timeline.

The clarification, and why it was needed

The framing of the New York meeting drew swift criticism, with commentators asking why a privatised, majority privately-owned airline would need government-brokered financing at all. Schehzad's statement on X pushed back directly: "The government is neither buying aircraft for a privatised PIA nor has it announced any sovereign guarantee or taxpayer-funded loan for doing so." He said the government's role was limited to helping PIA and other Pakistani entities access international financing and suppliers, rather than assuming their commercial risk on the state's own balance sheet.

He added that under any eventual US EXIM arrangement, the bank would structure financing secured against the aircraft themselves and would assess the creditworthiness of the airline or the leasing entity involved — the standard model EXIM uses for foreign buyers of US-made Boeing jets, and one that does not require a government guarantee to function.

Where PIA stands since privatisation

The government sold 75 percent of PIA's shares to a consortium led by Arif Habib Corporation in a transaction completed at the start of 2026, handing the winning bidder management control of the airline. The state does not hold a "golden share" and has said it does not intend to exercise operational control going forward, with the sale of the remaining 25 percent expected to conclude later this year. That ownership structure is precisely what makes the aircraft-financing question sensitive: any hint that public money might underwrite a privately-run airline's fleet would cut against the rationale for privatising it in the first place, which is also the same logic that shaped the government's fourth IMF review, where reducing the state's exposure to loss-making commercial entities has been a recurring condition.

The bigger picture: reserves under management

The EXIM conversation is part of a broader push by Aurangzeb's ministry to line up external financing across several capital-intensive sectors at once — aviation, refining and mining — at a moment when Pakistan's own foreign exchange position, while improved, remains something officials are managing carefully rather than something they can spend freely against. Reko Diq alone carries a pledged $10 billion in investment before it reaches full production, a scale of capital that Pakistan's own reserves were never going to fund domestically, which is why Islamabad has spent much of 2026 courting financing partners in Washington, Riyadh and Beijing rather than trying to carry these projects on its own books.

Build Better Pakistan's Economy Desk is tracking Pakistan's post-privatisation financing arrangements and will update this piece as any formal EXIM Bank agreement is announced.