Pakistan to get $4.5 billion from ITFC to fund imports

ISLAMABAD: Pakistan will get a funding of $4.5 billion from the International Islamic Trade Finance Corporation (ITFC) to finance imports of petroleum products in three years, the government said on Monday.

ITFC, an autonomous entity within the Islamic Development Bank Group, signed a 3-year framework agreement for a cumulative amount of $4.5 billion with the government of Pakistan to provide financing for the import of essential commodities such as crude oil, refined petroleum products, liquefied natural gas and urea.

Minister of Economic Affairs Omar Ayub witnessed the signing ceremony between ITFC CEO Hani Salem Sonbol and Ministry of Economic Affairs Secretary Noor Ahmed. The ceremony took place virtually.

Imports of petroleum products and fertilisers accounted for more than 20 percent of $50 billion import bills in the first 11 months of the current fiscal year, according to the Pakistan Bureau of Statistics.

The framework agreement also covers ITFC’s support for trade related technical assistance projects in the country, which will be selected jointly by both parties according to the national economic priorities and development plan of the country. 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.

The financing available through this facility will be utilised by Pakistan State Oil, Pak-Arab Refinery Limited and Pakistan LNG Limited for import of crude oil, refined petroleum products and LNG during the years 2021/2023.

Sonbol said the framework agreement reflects the importance of the longstanding cooperation between ITFC and Pakistan. “ITFC is continuously working closely with its member countries to meet their requirements by providing integrated solutions that include financing and capacity building tools that allows for maximising the development impact of ITFC interventions,” he said in a statement.

Ayub thanked the ITFC for arranging this financing, which will help Pakistan in meeting its import requirements of oil and LNG and ease pressure on cash reserves of the country. “We are delighted and we will continue to mobilise financial resources to support Pakistan in its endeavours to achieve its economic targets through the new framework agreement,” he said. The minister commended the role and endeavors of ITFC CEO and his team for arranging this financing at a very challenging time. “The agreement will further strengthen partnership between Pakistan and ITFC,” he added.