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Bank pledges $100 million from own resources: IDB to pool $500m syndicated credit for oil imports

Staff Report

ISLAMABAD: Dr. Syed Jaaffar Aznan, President of Islamic Development Bank (IDB) has said that IDB would extend a syndicated Facility of $500 million for financing Pakistan’s crude oil imports during the current fiscal whereas the bank would extend another $100 million financing for the same purpose.

An official statement Tuesday said that the IDB president assured this during a meeting with Dr. Salman Shah, advisor to prime minister on finance and revenue.

Aznan said the syndicated “Murabaha” financing has been arranged from international market for Pakistan with the participation of 14 International Banks from Europe, Middle East and Far East.

Murabaha is simply a sales contract that fixes the price of certain goods or items, including a pre-agreed profit margin.

The Government of Pakistan will be the beneficiary of the arrangements while PARCO is the executing agency for the imports, said the statement.

Dr Shah said that IDB offer is a reflection of confidence of the international financial market in the sound fiscal and financial policies of the Government.

He further said that signs of prosperity are visible in Pakistan and many banks of Middle East are anxious to invest funds in Pakistan through IDB.

Shah, suggested IDB to play an effective role to bring investors to Pakistan from the members countries having huge surpluses as Pakistan offers tremendous opportunities of investment in various sectors including infrastructure, power, water, construction of dams, HR development, Education, Health and Tourism.

The investment climate in Pakistan is business friendly and lot of foreign investors from Middle East, Malaysia and China are exploring the possibilities of investment in different sectors. Pakistan can become a lighthouse for other member countries because it has the competitive advantage of skilled labor force, fast growing market and geo strategic location, said the advisor.

He offered assistance to IDB to develop a Pakistan specific strategy paper so as to increase the trade financing and investment from the members Countries in Pakistan. “We are gradually over coming the problem of negative perception of Pakistan abroad and the economy is moving in the right direction as more and more foreign investors are reposing confidence in Pakistan,” he added.

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