KARACHI: The China Development Bank (CDB) and Habib Bank Limited (HBL) during the historic visit of President Xi Jinping to Pakistan in April 2015, the two banks on Monday signed a landmark $500 million financing agreement at a ceremony held at the CDB head office in Beijing, a statement said.
CDB Chairman Hu Huaibang and HBL Chairman Sultan Ali Allana witnessed the signing of the agreement by Zhao Yaozhong, president of CDB Sichuan, and Nauman Dar, president of HBL.
This is the first-ever agreement of its kind between a Chinese and a Pakistani bank under which medium- and long-term foreign currency financing will be provided to a Pakistani financial institution.
The CDB will provide $300 million to HBL for long-term financing for the energy projects in Pakistan and $200 million for offshore working capital financing needs.
This agreement marks a historic step in further promoting financial and economic cooperation between Pakistan and China and will allow HBL to provide the much-needed foreign currency liquidity to finance the development of projects in Pakistan, including projects under CPEC, it said.
The facility is testament to the growing cooperation between CDB, the largest development financial institution in the world and HBL, the largest bank in Pakistan.
Last week, the HBL announced to receive a licence for setting up a branch in China.
The first bank from Pakistan and also the first South Asian bank to get the permission to set up its banking operations in Urumqi, the largest city in the province of Xinjiang, which borders Pakistan along the traditional Silk Route.
Urumqi is a growing commercial and trade center and the regional hub for the Belt and Road Initiative in Central Asia.