Pakistan will get a funding of $4.5 billion from International Islamic Trade Finance Corporation (ITFC) in order to finance imports of petroleum products in three years.
Pakistan and ITFC signed a $4.5 billion new framework agreement on Monday. Noor Ahmad, the Secretary of Economic Affairs Division, and from ITFC, Hani Salam Sonbol, the Chief Executive Officer signed the agreement. Federal Minister for Economic Affairs, Umar Ayub Khan was also present at the ceremony.
This financing will be utilized by Pakistan State Oil, Pak-Arab Refinery Limited, and Pakistan LNG Limited for the import of crude oil, refined petroleum products, and LNG for the period from 2021 to 2023. The agreement will facilitate the identification of other areas of cooperation at Pakistan and regional levels and increase the trade, trade capacities of relevant state authorities and financial institutions and trade cooperation in the country.
This kind of agreement was done in April 2018 but the finance facility under that program could not go beyond $3 billion as private refineries could not import crude oil. Only Pak-Arab Refinery Limited and Pakistan State Oil used the facility.
The CEO of International Islamic Trade Finance Corporation which is a subsidiary of Islamic Development Bank said on the occasion of signing that this agreement shows the importance of longstanding cooperation between ITFC and Pakistan.
He said, “ITFC is continuously working closely with its member countries to meet their requirements by providing integrated solutions that include financing and capacity building tools that allow for maximizing the development impact of ITFC interventions.”
Umar Ayub Khan, the Federal Minister said, “We are delighted and we will continue to mobilize financial resources to support Pakistan in its endeavors to achieve its economic targets through the new Framework Agreement and the partnership between Pakistan and IRFC would strengthen.”
International Islamic Trade Finance Corporation provides trade financing to its member countries after putting together funds from financial institutions in the Middle East. Previously, the funds, provided by this organization could not be utilized fully but it is expected that this time when the economic activities in the country are moving up, these funds would be fully utilized.