The International Islamic Trade Finance Corporation (ITFC), an autonomous subsidiary within the Islamic Development Bank Group (IDBG), will provide a $761.5-million Murabaha financing facility to Pakistan for import of petroleum products on deferred payment.
The Economic Affairs Division (EAD) said the development comes as a result of successful discussions between Minister for Economic Affairs Omar Ayub Khan and Eng. Hani Salem Sonbol, CEO at ITFC.
The ITFC Murabaha Financing Facility of $761.5 million has been made effective and ready for utilisation by PSO, PARCO and Pakistan LNG for import of oil and gas, the division added.
"Due to higher demand amid strong economic recovery, financing is enhanced from $300 million to $761.5 million," said the ministry in a statement.
ITFC to provide $600m to finance POL products’ imports
"The upcoming ITFC financing will help ease pressure on exchange rate and stabilise forex reserves. It also reflects confidence of IFIs in Pakistan’s economy."
Last week, the Saudi Fund for Development (SFD) announced the issuance of the Royal Directive to deposit an amount worth of $3 billion into the central bank of Pakistan. Additionally, the SFD said that the royal directive was also issued to finance the oil derivatives trade with a total amount of $1.2 billion throughout the year.
Back in June, the ITFC signed a 3-Year Framework Agreement for a cumulative amount of $4.5 billion with the Government of Pakistan in order to provide financing for the import of essential commodities such as crude oil, refined petroleum products, LNG, and urea, said a press release.
Three-year framework: Pakistan, IITFC sign $4.5bn agreement
Within the context of its trade integrated solutions approach, the Framework Agreement also covers IITFC's support for trade-related technical assistance projects in the Islamic Republic of Pakistan, which will be selected jointly by both parties according to the national economic priorities and development plan of Pakistan.
The agreement will facilitate identification of other areas of cooperation at country and regional levels and to enhance and promote trade, trade capacities of relevant state authorities and financial institutions and trade cooperation in Pakistan.
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