In a strategic move to bolster Pakistan’s economy, the International Finance Corporation (IFC) is expanding its collaboration with Bank Al Habib Limited, a longstanding client, to facilitate the import of crucial goods and equipment. This partnership aims to support Pakistan’s sustainable recovery from the far-reaching impacts of the COVID-19 pandemic.
IFC’s enhanced trade facility with Bank AL Habib is specifically designed to encourage the import of essential capital goods. This includes vital equipment, machinery, and tools that are critical for various sectors within Pakistan. The initiative operates under IFC’s Global Equipment Finance Facility (GEFF), which provides guarantees for up to five years to select partners, focusing on imports that contribute to climate change mitigation and adaptation.
This project empowers Bank AL Habib Limited to issue letters of credit with tenors up to 37 months. This extended timeframe is particularly significant for Pakistani businesses as it addresses the import constraints that have arisen due to the global pandemic. By providing this financial backing, the partnership ensures that businesses in Pakistan can access the necessary capital goods to maintain and expand their operations.
Mansoor Ali Khan, CEO of Bank AL Habib Limited, emphasized the significance of this partnership, stating, “We deeply value our long-term relationship with IFC and their Global Trade Finance Program in Pakistan. IFC’s enhanced support will significantly increase our trade finance capabilities, allowing us to better serve our clients by facilitating the import of essential capital goods, thereby meeting their critical business needs.”
Bank AL Habib Limited’s participation in IFC’s Global Trade Finance Program (GTFP) underscores its commitment to supporting trade in emerging markets. The GTFP is designed to reduce risks associated with trade transactions by providing partial or full guarantees against underlying trade instruments, effectively covering the payment risks for participating banks like Bank AL Habib.
Khawaja Aftab Ahmed, IFC’s Incoming Regional Director for the Middle East, Pakistan, and Afghanistan, highlighted the broader economic impact of this collaboration. “Trade finance is a critical enabler for the movement of goods and services, both into and out of Pakistan. This is essential for supporting businesses and securing livelihoods,” Ahmed stated. “IFC’s support for Bank AL Habib will empower this key partner to more effectively assist its clients in importing vital goods during this challenging recovery period, ultimately contributing to sustainable economic growth in Pakistan.”
Since 2005, IFC has facilitated approximately $200 billion in trade across developing economies. In Pakistan alone, IFC’s GTFP commitments have reached $4.77 billion since its inception. These commitments span a wide range of sectors, including agriculture, chemicals, food and beverages, healthcare, energy, industrial products, telecommunications, and textiles, demonstrating the breadth and depth of IFC’s impact in the region.
About IFC
IFC, a member of the World Bank Group, stands as the largest global development institution focused exclusively on the private sector in emerging markets. Operating in over 100 countries, IFC leverages its capital, expertise, and influence to foster markets and opportunities in developing nations. In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, harnessing the power of the private sector to combat extreme poverty and promote shared prosperity amidst the ongoing global economic challenges. For further details, please visit www.ifc.org.
