On Monday, Pakistan and International Islamic Trade Finance Corporation (ITFC) signed an agreement amounting to $386 million for the import of oil and LNG.
The signing of the financing agreement amounting to $386 million with the International Islamic Trade Finance Corporation (ITFC), a subsidiary of the Islamic Development Bank (IsDB) Group, for the import of oil and LNG was held in Economic Affairs Division.
Pakistan State Oil Company Limited (PSOL), Pak Arab Refinery Limited (PARCO), and Pakistan LNG Limited (PLL) will utilize this facility. Economic Affairs Division and ITFC and the representatives of PSO, PARCO, and Pakistan LNG Limited signed this agreement. The financing Agreement provides trade financing amounting to $386 million for a period of one year for the import of oil and LNG.
Moreover, $1.2 billion was agreed by the ITFC to provide trade financing during the fiscal year 2020 for the import of oil and LNG by PSO, PARCO, and Pakistan LNG Limited. This facility is the part of the Framework Agreement that was signed with ITFC in April 2018 for a total envelope of $4.5 billion over for a period of three years (2018-2020).
However, the signing of this agreement will benefit in financing the oil and gas import bill of Pakistan and will ease the pressure on foreign exchange reserves. This agreement reflects the confidence of international financial institutions in Pakistan’s economy and its future.
Both sides seem ready to work with collaboration and closely during the signing ceremony for the mobilization of the socio-economic development of the country. The government is encouraging public and private sectors to utilise alternative fuels to meet the gap in energy demand. Currently, Pakistan has two RLNG terminals with 600 million cubic feet per day of re-gasification capacity.