Govt, ITFC sign $761.5 million financing agreement

ISLAMABAD: The Ministry of Economic Affairs and the International Islamic Trade Finance Corporation (ITFC) have signed a financing agreement worth $761.5 million to import crude oil, refined petroleum products and liquefied natural gas (LNG).

EAD secretary Mian Asad Hayaud Din and ITFC CEO Hani Salem Sonbol signed the financing agreement.

The facility has been made effective immediately and ready for utilisation by the Pakistan State Oil (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 the ITFC in June 2021 for a total envelope of $4.5 billion ($1.5 million annually) for a period of three-years.

Originally, ITFC has agreed to provide the financing of $300 million; however, due to the growing energy needs of the country and enhanced confidence level of the international financial institutions on economic reforms and recovery, amid the Covid-19 pandemic, the financing was oversubscribed 2.5 times to $761.5 million from $300 million.

The financing facility will also be helpful in financing oil and gas import bill of the country and easing pressure on foreign exchange reserves of the country.

Mian Asad Hayaud Din appreciated the support of the ITFC for arranging $761.5 million for trade financing.

He also lauded the efforts of Hani Salem Sonbol and his team for making this transaction successful.

The ITFC and the government of Pakistan have also agreed to continue their cooperation in the future to mobilise financial resources and to support Pakistan in its endeavours to achieve its economic growth targets through ITFC financing facility.