IFC considering new $100-200m investment
By Zamir Haider
ISLAMABAD: International Finance Corporation (IFC) Regional Director Sami Haddad said on Thursday that the corporation is considering new direct investments of $100-200 million in coming times.
Mr Haddad was talking at the signing ceremony of a Memorandum of Understanding (MoU) for $35 million between the IFC and Dewan Salman Fibres Limited (DSFL).
Finance Minister Shaukat Aziz was the chief guest on the occasion; Commerce Minister Abdul Razzak Dawood was also present. Mr Haddad represented the IFC, while Mr Zia Salman, DSFL managing director, signed on behalf of the company.
Mr Haddad said that the proposed IFC financing would consist of a $30 million senior loan, a convertible loan of $4 million, and $1 million participation in a convertible preferred stock issue.
He said the IFC financing would assist DSFL in expanding its polyester staple fibre capacity by adding a specialty fibre line of 20,000 tonnes per annum, refinancing its existing debt, and funding its need for permanent working capital.
“The IFC is looking at a significant increase in its investment programme in Pakistan, which is the ninth largest client in the world,” Mr Haddad said, adding, “The IFC’s portfolio stands at $458 million and is considering new direct IFC investments of $100 to $200 million, which is an increase of around 35 percent to the IFC’s existing portfolio.”
He said, “These new investments cover a variety of sectors ranging from Small and Medium Enterprise (SME) and housing finance to manufacturing, port terminals and telecom.”
Addressing the gathering, Finance Minister Aziz said that Gross Domestic Product Growth (GDP) growth during the current fiscal year would be 4.6 percent. “The improvement in GDP growth is based on better performance in the agriculture sector, as compared to last fiscal year, and improved performance in the manufacturing sector, which is expected to grow by five to six percent this fiscal year,” Mr Aziz said.
He said the economic environment in Pakistan was conducive towards attracting both local and foreign investment. “The present government’s prime aim was to provide an encouraging atmosphere to the private sector, remove all the irritants being faced by the sector in expanding or flourishing,” said Mr Aziz, adding, “And today’s signing of this MoU is a testimony to the efforts of the government.”
The minister was candid in saying that if the present government had not been able to restore Pakistan’s image as an economically stable country, it would have been quite difficult for both the IFC and DSFL to conclude their agreement.
“The present government brought macro-economic stability which triggers higher growth and restores confidence amongst the donor agencies, international finance institutions (IFIs), and the foreign investors to come in Pakistan and do business,” he said.
Mr Aziz said that the policies so far introduced by the government and the policies that are to be pursued in future were all focused towards encouraging the private sector and to strengthen this sector for competitiveness in the coming times vis-à-vis the challenges posed by the World Trade Organisation (WTO) rules.
He wished the management of DSFL all the best, and hoped that the agreement augured well for Pakistan, the private sector, and the Dewan Group. Mr Zia Salman of DSFL later said that the company’s expansion plans spoke of its commitment to Pakistan.