The Ministry of Economic Affairs, Government of Pakistan, and the International Islamic Trade Finance Corporation (ITFC) have signed a financing agreement amounting to $761.5 million for the import of crude oil, refined petroleum products, and LNG, etc.
Secretary Economic Affairs Division, Mian Asad Hayaud Din, and CEO ITFC, Eng. Hani Salem Sonbol, signed the agreement.
The facility has immediately been made effective and ready for utilization by Pakistan State Oil Company Ltd (PSO), Pak Arab Refinery Ltd (PARCO), and Pakistan LNG Ltd (PLL) for the import of oil and gas. This Syndicated Murabaha Financing facility of $761.5 million is for a period of one year and is a part of the umbrella Framework Agreement signed with ITFC in June 2021 for a total envelope of $4.5 billion ($1.5 million annually) for a period of three years.
Originally, ITFC had agreed to provide the financing of $300 million. However, due to the growing energy needs of Pakistan and an enhanced confidence level of international financial institutions on economic reforms and recovery amidst the COVID-19 pandemic, the financing was oversubscribed by 2.5 times, i.e., from $300 million to $761.5 million.
The financing facility will also be helpful in financing the oil and gas import bills of the country and easing pressure on foreign exchange reserves of the country.
Mian Asad Hayaud Din appreciated the support of ITFC in the form of trade financing. He lauded the efforts of the CEO ITFC and his team in making this transaction successful. The ITFC and Government of Pakistan have also agreed to continue their cooperation in the future to mobilize financial resources to support Pakistan in its endeavors to achieve its economic growth targets.