The government of Pakistan has signed a financing agreement worth $761.5 million with the International Islamic Trade Finance Corporation (ITFC) for the import of crude oil, refined petroleum products and liquefied natural gas.
Speaking at the signing ceremony of the deal on Wednesday, Economic Affairs Division Secretary Mian Asad Hayauddin appreciated the support of ITFC for arranging $761.5 million for trade financing.
He lauded the efforts made by ITFC CEO Hani Salem Sonbol and his team for making the transaction successful.
The two sides also agreed to continue cooperation to mobilise financial resources to support Pakistan in its endeavours to achieve the economic growth target.
The facility came into effect immediately and it is ready for utilisation by Pakistan State Oil Company (PSO), Pak Arab Refinery (Parco) and Pakistan LNG Limited (PLL) for the import of oil and gas.
The syndicated Murabaha financing facility worth $761.5 million has been granted for a period of one year and it is part of the umbrella framework agreement signed with ITFC in June 2021 for total funding of $4.5 billion ($1.5 billion annually) for a period of three years.
Originally, ITFC had agreed to provide financing of $300 million. However, the financing was oversubscribed by 2.5 times due to growing energy needs of the country, enhanced confidence level of international financial institutions on economic reforms and recovery from the Covid-19 pandemic.
“The facility will prove helpful in financing the oil and gas import bill of the country and easing the pressure on foreign exchange reserves,” said a statement.
Published in The Express Tribune, November 11th, 2021.