Pakistan secures $1bn in landmark financing deal

ISLAMABAD: The Ministry of Finance has signed a major $1 billion syndicated term finance facility, marking Pakistan’s re-entry into the international commercial market after nearly two and a half years, with strong participation from leading Middle Eastern banks and support from the Asian Development Bank (ADB).

In a statement, the finance ministry said the five-year multi-tranche facility – comprising both Islamic and conventional components – is partially backed by a Policy-Based Guarantee under ADB’s “Improved Resource Mobilization & Utilisation Reform” programme.

It is the first facility supported by ADB’s Policy-Based Guarantee linked to policy reform measures undertaken by an ADB Member Country, i.e Pakistan.

Dubai Islamic Bank served as the Sole Islamic Global Coordinator, while Standard Chartered Bank acted as the Mandated Lead Arranger and Bookrunner.

Other financiers included Abu Dhabi Islamic Bank (Mandated Lead Arranger), and Sharjah Islamic Bank, Ajman Bank, and Habib Bank Limited (HBL) as Arrangers.

The finance ministry termed the agreement a “landmark transaction” that signals renewed trust in Pakistan’s fiscal management and economic direction.

Notably, the Islamic component of the facility makes up 89 per cent of the total amount and has been structured in full compliance with AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions) standards.

The ministry said the deal reflects growing confidence among regional financial institutions and underscores Pakistan’s improving macroeconomic indicators and fiscal resilience. “It also marks the beginning of new partnership of Government of Pakistan with Middle Eastern banks.”

It added that the ADB Programme is designed to support Pakistan to build long-term fiscal resilience and stability and has supported Pakistan’s re-entry into international commercial markets, with significant interest from Middle Eastern Banks.

“Government of Pakistan has entered into the Middle Eastern financial market after nearly two and a half years, success of which indicates the renewed trust of the market in the fiscal stability and the overall improvement in the macroeconomic indicators of Pakistan.”