I am sure PAF would want to purchase the kits upfront and ask LM to outsource actual upgrades to a third party, i.e. TAI or Poland (which is doing the upgrade inhouse). Only flight testing and certification will be done in USA.
The kits, and any other equipment will come as a package bounded by ITAR/EUM. It might be possible to to negotiate the terms with LM/USA for a third-party upgrade depot, however, Turkey probably wouldn't be that third-party as they are not certified to manage USA origin LM equipment (AFAIK, they are only allowed to integrate their domestic subsystems). Poland on the other hand is certified for such a project but that doesn't help Pakistan's case if an embargo is later imposed (because it'll restrict the third-party help as well).
Recently, after a very long time, US EXIMP bank agreed to finance a large part of Reko Diq Copper Mine project. As i had mentioned this earlier, this is a massive move. It is entirely possible this was to ensure further financing inroads by US EXIMP bank(s) with help of SIFC of course since the banks do a lot of risk and due diligence before agreeing to finance in markets like Pakistan. They would have no issue financing F-16s as well. That way Pakistan can make up payments over a decade and not have to shell out hard cash upfront.
I believe the last time any major US EXIMP bank financing was done for Pakistan was during Musharraf time when PIA bought B777s instead of the much better optioned A330 from Europe.
EXIM won't finance such a project and here's why
Mineral extraction and civilian aircraft is the purview of EXIM, and hence the sale of Boeing aircraft and Reko Diq financing/investment for Pakistan was approved.




