ISLAMABAD: Pakistan has signed a five-year long-term financing facility worth $1 billion, partially backed by a Policy-Based Guarantee under the Asian Development Bank’s (ADB) “Improved Resource Mobilisation and Utilisation Reform” programme, the Ministry of Finance said in a statement on Wednesday.
The agreement aims to strengthen the country’s economic reform agenda and enhance its resource management strategies.
According to a statement, the Ministry of Finance has entered into a five-year long-term financing deal with a group of commercial banks.
Dubai Islamic Bank acted as the Sole Islamic Global Coordinator while Standard Chartered Bank acted as the Mandated Lead Arranger and Bookrunners, the Ministry of Finance stated.
Other financiers include Abu Dhabi Islamic Bank as the mandated lead arranger and Sharjah Islamic Bank, Ajman Bank and Habib Bank Limited (HBL) as arrangers.
The facility is a landmark transaction for the Government of Pakistan that demonstrates strong support from leading financiers in the region.
This is a 5-year multi-tranche facility including both Islamic and conventional tranches. The Islamic facility was structured to be fully compliant with AAOIFI standards and accounts for 89 percent of the total financing amount. The remaining 11 percent is from conventional financing.
The transaction is also the first facility supported by ADB’s Policy-Based Guarantee linked to policy reform measures undertaken by Pakistan.
The ADB Program is designed to support Pakistan in building long-term fiscal resilience and stability and has supported Pakistan’s re-entry into international commercial markets, with significant interest from Middle Eastern Banks, the Ministry of Finance stated.
Pakistan’s government has entered the Middle Eastern financial market after nearly two and a half years, the success of which indicates the renewed trust of the market in fiscal stability and the overall improvement in Pakistan’s macroeconomic indicators.
This transaction also marks the beginning of a new partnership of the Government of Pakistan with Middle Eastern banks.
