A member of the Islamic Development Bank Group, ITFC has agreed to loan $1.1 billion to Pakistan for oil and LNG imports in the current year.
Khusro Bakhtyar, the Minister for Economic Affairs who was present at the ceremony of signing an agreement of loan, worth $1.1 billion from International Trade Finance Corporation (ITFC) to Pakistan on Wednesday, said, “ITEC financing of oil and LNG imports was instrumental in the revival industrial sector of Pakistan economy.” He added that financing commitments reflect the confidence in international financial instructions in Pakistan’s economy.
ITEC is a member of the Islamic Development Bank Group. There was a big reduction in the demand for oil in the country due to the pandemic but bow the economy is recovering and the consumption of oil and LNG is increasing with the rise in the industrial sector and consumer demand. This amount of loan would be utilized by the State-owned Pakistan State Oil, Pak-Arab Refinery and Pakistan LNG limited to import of crude oil, refined petroleum products, and LNG during 2021.
The statement, issued on the occasion said, “This will be helpful to augment foreign currency reserves of the country and provide resources to meet the oil import bill. “The oil bill which is about 20% of the imports, Pakistan has been arranging external financing to support its balance of payments condition beyond by remittances and debts. This loan will be a big help in this regard.
This agreement was signed by the Economic Affair Division Secretary, Noor Ahmad, and Chief Executive Officer of ITEC, Hani Salem Sonbol. The CEO of ITFC said, “Pakistan is the 2nd largest beneficiary of ITEC financing. ITEC would continue its support to meet financial needs of Pakistan for import of crude oil, petroleum products, and LNG.”
Pakistan and ITEC also agreed to go for another three-year financing framework agreement while expanding the scope of the plan to also include agriculture commodities including DAP fertilizer from the existing pipeline of oil products and LNG.
This plan would be presented for approval in the annual meeting of the Islamic development bank in the month of June. Pak-Arab Refinery was the only beneficiary for ITEC before 2018. Later Pakistan State Oil also became eligible for financing by ITEC and now LNG has also become eligible for being financed by ITEC.