The International Islamic Trade Finance Corporation (ITFC), a subsidiary of the Islamic Development Bank, and Pakistan signed an agreement under which the former would make available $761.5 million of syndicated loan for commodity financing, particularly oil and gas.

A financing agreement was formally signed by ITFC’s Chief Executive Officer Eng. Hani Salem Sonbol and Mian Asad Hayaud Din, Secretary Ministry of Economic Affairs (MEA) for their respective sides. The financing would be used for import of crude oil, refined petroleum products and LNG etc.

The facility has been made effective immediately and ready for utilisation by Pakistan State Oil Company Ltd (PSO), Pak Arab Refinery Ltd (Parco) and Pakistan LNG Ltd (PLL) for import of oil and gas.

This Syndicated Murabaha Financing facility is for a period of one year and is a part of umbrella Framework Agreement signed with ITFC in June 2021 for total envelop of $4.5bn ($1.5m annually) for a period of three years.

Within the context of its trade integrated solutions approach, the framework agreement also covered ITFC’s support for trade related technical assistance projects in Pakistan, which will be selected jointly by both parties according to the national economic priorities and development plan of Pakistan.

The agreement also requires 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 the country.

Article first published in Dawn News on 11 November, 2021.
Read full article: ITFC gives $761m to Pakistan for energy imports