IFC announces first local-currency investment in Pakistan

ISLAMABAD: The International Finance Corporation (IFC), the World Bank Group’s private sector arm, has announced its first local-currency investment in Pakistan, aimed at strengthening the country’s agricultural sector.

According to an IFC press release issued on Tuesday, the investment has been made through an unfunded partial credit guarantee of up to Rs33.6 billion.

Under the arrangement, Standard Chartered Bank Pakistan Limited will provide long-term financing to Engro Fertilizers Limited.

The press release said that this partnership marks IFC’s first local-currency investment in Pakistan and will help expand access to long-term financing in both local and foreign currencies.

Such financing is considered critical for economic growth, particularly in key sectors such as agriculture and micro, small and medium enterprises.

The financing will help mobilise local capital and support Engro Fertilizers in strengthening Pakistan’s agricultural value chain, the IFC said.

According to the press release, the investment — aimed at stabilising Pakistan’s agricultural sector and enhancing food security — will also benefit from a first-loss counter-guarantee provided by IFC Canada’s Facility for Resilient Food Systems.

It said that by using financing in Pakistani rupees, Engro Fertilizers is promoting the use of local capital to enhance operational stability.

The financing will enable Engro Fertilizers to invest in the maintenance of its facilities and other activities, ensuring the uninterrupted supply of urea and other fertilisers to meet national requirements.

The press release said the financing will also support ongoing programmes for farmers, in line with Engro’s core mission of ensuring reliable production and aligned initiatives.

The IFC noted that Pakistan’s agricultural sector contributes 24 per cent to the country’s gross domestic product, 70 per cent of exports, and 40 per cent of employment, making it vital for long-term growth.

Quoting Engro Fertilizers Chief Executive Officer Ali, the press release said Engro has consistently sought to address Pakistan’s most pressing challenges in a meaningful way.

Strengthening local value chains through local capital reflects the company’s commitment to the country and its farmers, who form the backbone of Pakistan’s economy. He also thanked IFC and Standard Chartered Bank for supporting this mission.

The statement also quoted Ashraf Mujahid, IFC’s Regional Industry Head for Manufacturing, Agribusiness and Services for the Middle East and Central Asia, who said the investment reflects a strong partnership with Engro Fertilizers and Standard Chartered Bank and a shared commitment to delivering sustainable solutions.

The project opens new avenues for long-term local-currency financing, supporting growth and financial stability in a sector critical to the national economy.

Similarly, Standard Chartered Pakistan Chief Executive Officer and Head of Coverage Rehan Sheikh was quoted as saying the bank remains committed to providing financing solutions that support sustainable growth and long-term stability in Pakistan’s economy.

The IFC announcement comes nearly two months after an agreement between the State Bank of Pakistan and the IFC to expand private sector financing in local currency.

On October 21, the State Bank of Pakistan announced that an agreement had been concluded with the IFC under the International Swaps and Derivatives Association framework, enabling the IFC to invest in Pakistani rupees and better manage foreign exchange risks.