ISLAMABAD: The Ministry of Finance has signed a syndicated term finance facility of $1 billion partially guaranteed by a policy based guarantee of the Asian Development Bank (ADB)’s Programme “Improved Resource Mobilization & Utilisation Reform”.
An official statement by the Finance Ministry stated that Dubai Islamic Bank acted as the sole Islamic global coordinator while Standard Chartered Bank acted as the mandated lead arranger and book runners.
Other financiers include Abu Dhabi Islamic Bank as the mandated lead arranger and Sharjah Islamic Bank, Ajman Bank and HBL as arrangers. The facility is a landmark transaction for the Government of Pakistan that demonstrates strong support from leading financiers in the region.
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This is a 5-year multi-tranche facility including both Islamic and conventional tranches. The Islamic facility was structured to be fully compliant with AAOIFI standards, and accounts for 89 per cent of the total financing amount. The remaining 11 per cent is from conventional financing.
The transaction is also the first facility supported by ADB’s Policy-Based Guarantee linked to policy reform measures undertaken by an ADB Member Country, i.e. Pakistan.
The ADB Program 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.
This transaction also marks the beginning of new partnership of Government of Pakistan with Middle Eastern banks, the Ministry added. Federal Minister for Finance Muhammad Aurangzeb recently stated that they have gone back to the commercial market in this fiscal year and are in the process of syndicating around $2 billion of commercial borrowing and expecting to shore up reveres from the current around $11-12 billion to $14 billion by end of the current fiscal year.
Advisor to Finance Minister Khurram Shahzad, took to X formerly Twitter, and stated that Pakistan signed landmark financing deal with Middle Eastern banks backed by ADB - back into global markets after 2.5 years. Pakistan secures $1 billion landmark financing with ADB-backed guarantee and strong Middle Eastern banks’ support.
Government of Pakistan re-enters global markets with $1 billion syndicated financing. Pakistan attracts strong Middle East financing after 2.5 years. ADB-backed deal signals market confidence in Pakistan’s economic reforms. This multi- tranche Islamic-conventional competitive financing deal with regional banks shows fiscal reform gains traction“.
Copyright Business Recorder, 2025
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