ISLAMABAD: Pakistan and the International Islamic Trade Finance Corporation (ITFC) signed a $1.1bn trade financing facility for the import of oil and liquefied natural gas (LNG) in the current year.
The document was signed by Secretary Economic Affairs Division Noor Ahmed and Engineer Hani Salem Sonbol, Chief Executive Officer, International Islamic Trade Finance Corporation (ITFC) a subsidiary organization of Islamic Development Bank Group. Minister for Economic Affairs Makhdoom Khusro Bakhtiar witnessed the signing ceremony.
Under the Annual Financing Plan 2021, ITFC will mobilize trade financing of $1.1 billion during the year 2021. The financing available through this facility will be utilized by Pakistan State Oil (PSO), Pak-Arab Refinery (PARCO) and Pakistan LNG Ltd (PLL) for the import of crude oil, refined petroleum products and LNG during the year 2021.
According to a statement, this will be helpful to augment foreign currency reserves of the country and provide resources to meet the oil import bill. Such financing commitments reflect the confidence of international financial institutions in Pakistan’s economy.
ITFC CEO Hani Salem Sonbol highlighted that Pakistan and ITFC have long standing cooperation since the creation of the financial institution in 2008. He highlighted that Pakistan is the second largest beneficiary of ITFC financing. He assured that ITFC will continue its support to meet financial needs of Pakistan for import of crude oil, petroleum products and LNG.
Minister for Economic Affairs Khusro Bakhtiar thanked and appreciated ITFC’s support for Pakistan. He underscored the importance of partnership and between ITFC and Pakistan and highlighted the financing for import of oil and LNG.
The minister also appreciated ITFC’s role in the development of trade and financing in the OIC member countries. It was also discussed and agreed in principle to expand the scope of future cooperation for financing of agricultural commodities including fertilizers, and assisting Pakistan for developing a system of warehouse receipt financing facility.
Both sides agreed to finalize a new framework agreement potentially by June 2021. The minister welcomed and encouraged ITFC to play a bigger role in trade financing in Pakistan.