Govt arranges $390M financing for Reko Diq rail Connectivity

As the government expedites work on executing the multi-billion-dollar Rekodiq Gold and Copper project, the government has decided to initiate a $390 million project to connect Gwadar through a Railway link.

The government has declared the Reko-Diq Project as ‘qualified investment’ under the Act of Parliament and considers that railway track access is critical to transport the copper and gold from the mines in Balochistan.

 It will help with a bulk transport solution for the large volumes of material over the 1350 km route. Delay in Rekodiq Case Settlement: Final Liability nears $10b

Railways has decided to ink the Rail Development Agreement and Bridge Financing Agreement with Reko Diq Mining Company (RDMC) to provide bridge financing worth $ 390 million.

It will back the construction and upgradation of his facility. According to the agreed term sheet, the entire principal amount is at an interest rate of SOFR+250bps.

The Government of Pakistan will act as the guarantor for Main Line-III (ML-3), and the financing will be extended for a tenor of three years with accrued interest.

It will be repaid in a bullet payment at the end of the three-year period. Both agreements have been vetted by the Law Division, and the improvements made by the Law Division have been incorporated into both agreements.

In January 2023, the Railways Division was requested to conduct a survey of rail connectivity in coordination with the Reko Diq Mining Company (RDMC).

It had conducted route surveys, and RDMC expressed preference for a rail link via Port Qasim to connect ML-III and ML-I. 

Technical assessments have been conducted by M/s Vecturis, and subsequent deliberations were done through Joint Working Groups of railways.

The project framework includes track access, responsibilities, and operations. On June 17, 2025, a Committee under the Minister for Economic Affairs had recommended a bridge financing arrangement of $ 390 million for the Reko Diq Project. 

The Prime Minister had approved this arrangement on August 8, 2025. In order to  accommodate the planned movement of Reko Diq Mining Company from the mining site to Karachi Port, the existing Main Line-III (ML-3) railway section from Nokundi to Rohri requires urgent upgradation. Its current condition cannot sustain the projected freight load.